Ethnic minority employment gap is still a bridge too far

Findings from a National Audit Office report reveal there is still a long way to go to bridge the ethnic minority employment gap.

The ethnic minority employment gap remains stubbornly persistent, despite ongoing government attention and millions of pounds spent on numerous projects to close it.

The employment rate for the ethnic minority population is 60%, compared to 74% for the general population. A report by the National Audit Office (NAO) earlier this month found this gap costs the UK economy £8.6bn a year, and is only 1.3% smaller than it was 20 years ago.

Reasons for the gap, the report said, included large proportions of ethnic minorities living in deprived areas with high levels of unemployment, and discrimination when looking for work.

While the NAO report acknowledged the Department for Work and Pensions’ (DWP) strategy to tackle the issue had had some success, it concluded that efforts had “lacked continuity”. Outreach schemes have been discontinued – much to the astonishment of opposition MPs – with the DWP now focusing efforts on disadvantaged groups and rundown areas more generally, with local groups having more freedom to decide how to spend the cash.

The report said: “The strategy has been fragmented but is being refocused on those living in deprived areas. [This] carries the risk that some ethnic minorities may not receive the help they need to get a job.”

Varied success

Closer examination of the report shows that the government’s approach to the problem has been to throw vast sums of money at it. This method has had wildly varying degrees of success. About £40m was spent on two successful projects specifically targeting ethnic minorities and filling 15,500 jobs.

On the other hand, the much-hyped Fair Cities project, which aims to get ethnic minorities into jobs with major employers, has proved the most disappointing. Only 10% of the jobs target was achieved in 2005, the first year it ran, at a cost per job to the programme of £12,715.

Furthermore, a two-year pilot scheme focusing on using specialist employment advisers, and costing £1.5m, reached the conclusion that engaging with employers and local communities would take longer than two years.


The report also said that un-equal treatment by employers remained a significant barrier to work. This was despite little evidence of discrimination being reported back to Jobcentre Plus by ethnic minorities themselves and recorded by staff. The NAO said those staff could have a greater role in making ethnic minority customers aware of procedures for reporting suspected cases of discrimination.

Jobcentre Plus staff also believed the training they received in helping ethnic minorities was inadequate. Many felt it did not effectively cover the diverse cultures of the customers they were dealing with, and they lacked the time to access it properly.

The report also floated the idea of a diversity ‘kitemark’ for employers, signalling a commitment to equal opportunities. This idea has been proposed several times in recent years, but what appetite exists for it among business and what impact it might have remains unclear.

Bleak prospects

Employment minister Stephen Timms insisted progress to close the employment gap was being made, and pointed to the new £1.5bn Working Neighbourhood Fund to tackle ‘worklessness’ in poor communities. However, as the report made clear, projects to which this money is allocated vary in the extent to which they have targets for getting ethnic minorities into jobs.

The NAO said it was sceptical that this was the best way forward. The report concluded: “Unless the department is prepared to do more to reach out to the ethnic minority communities, prospects for increasing their employment rate remain bleak.”

MPs on the Public Accounts Committee have now launched an inquiry into the problem, with its first evidence session scheduled for next month. DWP permanent secretary Leigh Lewis will be the first to face a grilling it promises to be an uncomfortable encounter for him.

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