It is well known that being out of work increases the risk of poverty. In recent years there has also been a growing concern about the prevalence of in-work poverty in the UK; the majority of working-age households in poverty now have at least one member in employment. What measures policymakers in cities can take to improve poverty outcomes locally is the focus of our new report on ‘How cities can connect people in poverty with jobs’ carried out with colleagues at the Institute for Employment Research, University of Warwick.
The report reviews the national and international evidence for how policymakers can seek to improve outcomes at four stages of an ‘employment pathway’ – pre-employment; employment entry; staying in work; and in-work progression. In general the evidence on ‘what works’ tends to be stronger at the earlier stages of the pathway because this is where there has been a greater focus of policy effort and funding. The report finds that:
- At pre-employment stage (as an individual moves to becoming ‘job ready) – Information, Advice and Guidance (IAG) can play an important role, as can skills development programmes, particularly those tied to job-specific skills. Where individuals face multiple barriers to work intensive support may be needed.
- At employment entry stage – IAG and training interventions can also help support work entry. Good quality apprenticeships provide opportunities for individuals to combine work and skills development. Considering and influencing employer recruitment and selection practices are also important in helping disadvantaged groups access employment.
- For staying in work – there is some evidence for the importance of financial incentives. For some individuals in-work support can also be beneficial, particularly when they have been out of work for some time. In addition, the ‘fit’ of the initial job match also influences the sustainability of employment.
- For in-work progression – there is little evidence on what works. But this is a growing focus of policy. There is some evidence from the US on developing ‘career ladder’ type initiatives which support individuals into work, and to progress once in employment, in particular sectors through structured programmes. This evidence suggests a sector-based approach can be beneficial when developing interventions. Supportive Human Resources (HR) practices can also support progression.
The report outlines a range of measures which can be taken by policymakers at city level, including those that can be implemented now and those that would require further devolution. Actions that can be implemented now include better joining-up of services and developing ‘add ons’ to core employment programmes to reflect local needs. The public sector can play an important role in ‘leading by doing’ and through seeking to maximise the impact of public procurement and Section 106 agreements to improve employment outcomes. Local Enterprise Partnerships can also play an important role around influencing and disseminating ‘good practice’ among employers in relation to recruitment practices and in-work progression, as well as ensuring good quality Labour Market Information (LMI) is available locally. Local actors including LEPs and local authorities can also seek to support and encourage Living Wage payments by employers locally.
With additional powers and resources city-level policymakers would be able to develop quality training programmes focused on in-work progression, design more bespoke pathways into training and jobs with local employers, as well as invest in better leadership, management and HR capacity. They might also develop targeted wage subsidies and more intensive modes of support for particular hard-to-help groups.
So there are a number of ways in which local policymakers can act on low-pay and poverty. However, local areas also face constraints to local action in generating improved outcomes. The different conditions of local labour markets frame the opportunities for action and the local evidence base on ‘what works’ remains limited around newer areas of policy interest including in-work progression. Local areas are also unable to influence core employment, tax and benefit policies which remain fundamental to poverty outcomes. An effective anti-poverty policy is therefore one in which national and local policies must be effectively aligned to prioritise poverty reduction.