Financial incentives to encourage those claiming unemployment benefits to get back into work could be doubled for Londoners, a Greater London Authority (GLA) chief has said.
Anthony Browne, the mayoral policy director for economic development at the GLA, told Personnel Today there was a “strong case” to raise the Better Off in Work credit from £40 to £80 and this was something the body was currently investigating.
The credit was created to ensure those who have been unemployed for 26 weeks or more can get back to work, earning £40 a week more in employment than they would on benefits. The scheme is set to be rolled out nationally by the government from January 2011.
The news comes as official unemployment figures yesterday revealed the number of people out of work fell by 33,000 to 2.45 million in the three months to January.
In London, the number of unemployed fell by 20,000 to 359,000.
Browne said: “The government is now in the process of introducing the £40 Better Off in Work guarantee, but given the extra costs in London, and particularly the costs of transport, there’s a strong case to introduce, we think, an £80 Better Off in Work guarantee for the capital.”
He added the cost of childcare, housing and transport were up to 60% higher in London than they were in the rest of the country.
Browne said the GLA and the Centre for Economic and Social Inclusion were looking to publish research into the credit after the general election, expected to take place on 6 May.
At the London Welfare to Work Convention yesterday, Browne warned the unemployed “will not work unless it pays to work”.
He added one in 10 Londoners of working age who want to work are currently not doing so, while one in four 18- to 24-year-olds are also unable to find work.
But Sue Royston, social policy officer at charity Citizens Advice, said increasing the credit to £80 would not help in the longer term as after the credit is withdrawn – it will only be paid for 26 weeks – people would find their wages would drop.
Browne said the GLA was currently looking into this problem. He said: “There’s no point helping people in the first step if it will hamper them further down the line.”
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