Kevin Rowan column

Jan 30 2006 By Kevin Rowan, The Journal

With the highest rates of incapacity benefit claimants in what is the smallest regional economy in the country, it is understandable why there was much North-East interest in last week's launch of John Hutton's Green Paper, Empowering People to Work.

Benefit reform is a tricky, subjective area and there is no surprise that the proposals have been greeted as both too radical and not radical enough.

Some suggest people on benefits should be squeezed back into work by reducing payments. Others suggest people should be enabled to be on benefits without any real checks and balances to the validity of their situation.

Neither approach is particularly credible and in that regard, maybe Hutton has started well.

There are undoubtedly proposals in the Green Paper which would benefit the North-East, specifically the roll-out of the pathways-to-work programmes, which have already helped thousands of people off benefits and into work by providing individualised support.

And the targeted support for lone parents would also be valuable in the North-East.

If there is room to criticise the proposals, it is that they are almost exclusively supply-side interventions. Working with employers to provide "taster" employment sessions for lone parents is an interesting concept.

Also welcome are efforts to encourage employers to be more flexible in employment offers to make it easier for older people and those with caring responsibilities to work.

There remain demand-side challenges though. Firstly, while it is good news that employment is going up and economic inactivity is declining, it is also the case that vacancies are diminishing, making it harder for people with health issues or caring responsibilities to compete for work.

Secondly, there is a huge skills issue. More than 50% of people on IB have no qualifications. Thirdly, there has to be concerted efforts to re-assure employers about taking on "more difficult to employ" individuals.

Every claimant is on IB for a reason. Half have mental health problems. The Government view is that this should not be a barrier to employment. That is right, but we can't ignore the fact that employers need to consider these issues when employing them, and that employers need advice and support to be able to employ them with confidence. I am disappointed this does not appear in the current proposals.