11 June 2007

The Rt Hon John Hutton MP

Secretary of State for Work and Pensions

Disability, Skills and Work: Raising our Ambitions

Social Market Foundation and Disability Rights Commission

Monday, 11th June 2007

[Check against delivery]

Can I first of all thank Stephen (Evans) and the Social Market Foundation for their work in producing this report – and also the Disability Rights Commission, for their support of today’s event.

I very much welcome this report and the detailed analysis it presents around the link between skills, disability and work.

Later this week, the Government will be publishing its response to last December’s report from Lord Leitch on how we can achieve World Class Skills. In doing so, we will set out an implementation plan that will mark a new national commitment to reducing the skills gaps that we face as a nation.

What today’s report makes clear – is that our commitment to addressing these skills gaps is not just about securing our future economic prosperity – it is just as critical for achieving our ambition of a fairer society where opportunities are widely distributed and discrimination on the basis of disability is tackled head on.

For if we are to reach our goals of a record 80% employment rate and the eradicatation of child poverty in Britain – it simply can not be done without taking action to address the disadvantages that are still too often faced by disabled people in Britain today.

And as this report shows, this must include action on skills.

We can not hope to achieve a fairer society when adults living in households in social class 1 are roughly four times as likely to reach level 2 or above in literacy than those in households of social class 5.

Today there are 4.6 million people without qualifications and a further 1.5 million with qualifications below level 2. Disabled people account for a third of all those without formal qualifications. They are twice as likely as non-disabled people to have no qualifications; and twice as likely to be living in poverty. And as incomes have risen across the working age population, so the relative position of disabled people has struggled to keep pace. While a quarter of all children living in poverty now have long-tem sick or disabled parents.

While disabled people and those with long term health conditions have lower employment rates than the non-disabled population at all levels of qualifications – the magnitude of that employment rate gap for those with no qualifications is almost double that for those with level 2 qualifications.

And with the demand for low skills likely to continue falling - with Leitch predicting some 850,000 fewer low skilled jobs by 2020 - the impetus for change could not be greater.

But as we consider these challenges, I believe we should also take confidence from how far we have come over the past decade.

The 2005 Disability Discrimination Act completed the most far-reaching programme of disability rights legislation that any European country has so far put in place.

Our record investment in Jobcentre Plus, in the New Deal for Disabled People and in the ground-breaking Pathways to Work Programme has enabled the employment rate of disabled people to reach 50% for the first time.

The Welfare Reform Act 2007 has fundamentally changed the structure of the welfare system - shifting the focus onto what people can do rather than what they can’t.

And through the creation of ground-breaking institutions such as the DRC; and more recently, the Office for Disability Issues, we are pressing forwards with our vision of delivering substantive equality for disabled people by 2025.
As part of this, the Office for Disability Issues is promoting a more joined up approach across Government and piloting practical new ways of delivering services - such as through “individual budgets” and the creation of a national forum to enable the views of disabled people to be heard by policymakers at the highest level. Choice and voice – powerful tools for changing public services for the better.

I believe this progress provides a strong foundation on which to meet the challenges highlighted by today’s report.

And there are two that stand out in particular.

Firstly, how we can better integrate skills and welfare provision to improve the focus on sustained employment and on progression through the workplace.

And secondly, how we can go further in helping employers step up to the responsibility to promote substantive equality, and in particular to capture more effectively the full potential of disabled employees.

I’d like to say a few words about each.

First, skills and progression in the workplace.

Through Jobcentre Plus and our wider welfare to work strategy, we have invested heavily in helping people find work. But as David Freud’s review of welfare made clear, in future our labour market interventions must place as much emphasis on job progression as we currently do now on job placement.

In today’s labour market, the typical worker changes jobs seven times during a working life. We need to make sure that the help on offer doesn’t get withdrawn to quickly.

Too often we think the job is done as soon as someone has entered the labour market. But helping individuals to acquire the skills, confidence and ambition to progress through the workplace has to be a core ambition of a dynamic welfare system. The old “Labour Exchange” of the past - where labour seeking work met employers anxious to hire - must now become the skills exchange of the future.

Achieving this will mean finding a new place for skills at the heart of a welfare contract for the 21 st century. A new approach to skills, that is based on a simpler, clearer, and more coherent system of delivery – that meets the needs of both business and individuals. And the Employment and Skills Commission must be at the forefront of this new approach.

Clearly one part of this must be an earlier and more focused assessment of the skills needs of those out of work. An assessment that is clearly grounded on an understanding of employer needs - properly integrating this assessment into the system of welfare support.

But the other part of this equation must be in-work skills training. We know that workplace learning increases average job tenure with a consistent and significant impact on earnings and productivity – and more so than adult learning or Government provided training programmes.

So there’s a clear role for employers here – but clear benefits too. We need to make sure that employees and employers take responsibility for driving demand in the system and shaping their skills needs.

Skills provision must be focused on our economic mission. A demand-led system of learning which provides employees with the skills their employers need. That enables employers to be competitive in the world market and individuals to get jobs and stay in jobs – meeting individual need at the right point in time.

If we can get this right, then I believe we will go some way to improving the skills training and support for disabled people – both in and out of work.

But, secondly, I believe we need to go further in getting employers themselves to do more in supporting both recruitment and retention through promoting the substantive equality of disabled people.

Research published by my Department earlier this year highlighted that, while employer awareness of the Disability Discrimination Act and employer attitudes towards tackling discrimination have both improved over the past four years, there is still a long way to go.

As many as 1 in 5 establishments were unaware of the employment provisions of the DDA; 1 in 3 unaware of the provisions relating to goods, facilities and services. Less than a fifth had understood that someone diagnosed with cancer would be included within the DDA definition of disability.

And while many of the larger organisations were aware of the DDA and making appropriate adjustments, the report found there was a challenge in encouraging these trends to filter down into the smaller, often single-site establishments, in sectors which do not traditionally think of themselves as being able to employ disabled staff or cater for disabled customers.

Through Access to Work, we are helping employers to make reasonable adjustments for disabled people – and by removing Access to Work support from central Government departments we have freed up more of the funding for smaller businesses. We are currently undertaking an evaluation of the programme as part of a wider review of all our disability-focused employment programmes. And we have significantly reduced clearance times in speeding up the process for claiming funds.

As the report acknowledges, Workplace Health Connect offers valuable information and advice for smaller firms.

This is particularly important when we see that the vast majority of disabled people acquire an impairment while actually in work. As today’s report highlights, every quarter around 600,000 people become sick or acquire an impairment as defined by the Disability Discrimination Act – and within one year 13% have left employment. The risk is particularly acute for those with low skills.

We have to be clear that employers are part of the answer not the problem. We will not succeed in changing employer attitudes by simply placing additional burdens on them. It has to be about enabling them to see and benefit from the huge potential that disabled people have to offer. The difference that they can make to an employer’s bottom line.

Today we are announcing the first stage of a new campaign called Employ Ability, which aims to engage employers in challenging negative and limiting assumptions about the capabilities of disabled workers. It will focus in particular on tackling risk aversion and discriminatory practices in medium sized businesses, motivating managers to take positive action to be fair and equal in their recruitment and retention activities.

After an initial stakeholder engagement phase to secure the active support and endorsement of disability organisations and trusted business intermediaries, we intend to run regional pilots in four cities in September with a planned roll-out to other areas across Britain from February next year.

In addition, the Realising Potential project is aiming to reach a thousand employers through twenty-two seminars taking place across the country. Bringing together the National Employment Panel and the Employers’ Forum on Disability, the project seeks to set out a compelling business case for the recruitment and retention of disabled people, improving their business awareness of disability issues and selling the benefits of disabled employees.

Such progress is I believe crucial, if we are to achieve a lasting step-change in attitudes towards disabled people.

Crucially, we must recognise that everyone needs to play a part in confronting the culture of low expectations that can characterise attitudes to disabled people - Government, employers and individuals alike.

Only through a change in approach right across society will discrimination and low achievement be seen not as an inevitable part of the culture of our country but as a fundamental barrier to our success; Only then can we hope to achieve full equality of opportunity with genuine independence and respect for all.

As today’s report makes clear, if improving the skills of disabled people to world leading levels would boost the UK economy by some £35 billion, equivalent to 18 extra months of growth over 30 years, the prize could not be more important. The opportunity for British business not only to compete but to thrive in the world marketplace. And as economic efficiency and social justice go hand-in-hand, so also the opportunity for families to lift themselves out of poverty – and for the children of low-skilled disabled parents to face the real prospect of getting on in life.

We face a moment of great opportunity as well as challenge. Through our collective endeavours we can change the future for the better; delivering fairness, prosperity and decency in our societies – with no-one left behind. That is the mission of modern welfare. A truly fair society of equal rights and opportunities for all is our goal. Together, I believe it is a goal we can achieve.