Local spending is the key to helping deprived areas

Employers need to work more closely with government agencies to eradicate unemployment hotspots in the UK.

A report by The Industrial Society calls for the Government to devise an effective employment strategy to keep jobs and money in deprived areas and help people in them to get and keep work.

The Industrial Society recommends the setting up of a new “Attachment Agency”, which would combine the Employment Service, Benefits Agency and New Deal programme. It would build long-term relationships with employers and jobseekers.

The society says individuals should be able to tailor employment and training programmes to companies’ needs.

Employment minister Tessa Jowell, who attended the launch, said, “The Government is not in the business of job creation for its own sake, but we want to invest in training and regeneration. We need to have more private and commercial organisations involved in welfare to work programmes.”

The report, In Search of Work: Employment Strategies for a Risky World, suggests that official figures understate the true extent of local joblessness. It also argues that the focus on welfare to work is not tackling local jobs gaps.

“These local economies lack ‘stickiness’, in that too much money flows out of the area which could be used to build the local employment infrastructure and generate much-needed new jobs,” said Max Nathan, author of the report.

There is evidence that residents of the average neighbourhood spend 37 per cent of their money outside the area, while poor areas lose 60-70 per cent of consumer expenditure. The Attachment Agency would attempt to ensure spending stayed within deprived areas.

Jowell said employment rates within regions vary by as much as 25 per cent. “There are problems with low levels of skills, loss of confidence among the long-term unemployed and transport problems for people taking up work,” she said.

“Our city action teams are addressing these problems, but we have to move beyond a national framework for labour market policies to a more responsive, cooperative form of action.”


By Paul Dinsdale

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