We are sitting on a demographic time-bomb. By 2015, there will be a 30% increase in the number of 45- to 74-year-olds and a 17% drop in 25- to 44-year-olds. This means 1.3 million fewer workers aged 25-35 in the next 10 years.
However, while both the public and private sectors are turning to older workers as a way to fill an impending skills gap, not everyone agrees that they are answer.
An independent report has urged the government to abandon its flagship employment scheme for older workers and divert the resources into supporting sick and disabled people back into the jobs market.
The study, by the Institute for Public Policy Research (IPPR), recommends that the Department for Work and Pensions (DWP) prioritise resources towards Pathways to Work at the expense of schemes such as New Deal 50 Plus, which it argues are failing to deliver.
John Adams, research director at IPPR North, said the tight labour market and general economic conditions have helped to increase opportunities for older workers and that more resources should be placed on schemes to get sick and disabled people back into work.
“Despite steady growth in employment levels since the early 1990s, levels of economic inactivity remain worryingly high. With only half of people with disabilities in work, the DWP must commit more resources to bringing disadvantaged groups back into work,” he said.
The government’s Pathways to Work scheme, launched in January, requires incapacity benefit claimants to contact a personal adviser every month in the first eight months of the claim when people can be most readily helped back to work.
Although it is still only a pilot scheme it has been seen as very successful in supporting people back into employment and Marilyn Howard, policy manager at the Disability Rights Commission, is keen to see it expanded.
“We would certainly welcome any extension of the Pathways scheme. At the moment it is only available in certain parts of the country but it has been very successful in raising jobseekers’ expectations and removing barriers to work,” she said.
The IPPR is also worried that a net reduction of about 30,000 posts at the DWP, ordered under the Gershon Review on efficiency, could threaten the scheme’s ability deliver improvements for disabled jobseekers. The policy body is also anxious about a general lack of experience of front-line staff delivering the support, and Adams warned that their numbers must not be reduced further.
“We’ve got some real concerns about the capacity at the DWP. We know, for example, that at one Newcastle office 46% of personal advisers have less than six months experience.
“Because of these limitations they must be priorities and that will make some hard choices for the DWP,” Adams added.
The study revealed that other groups including ethnic communities and lone parents are still hugely under-represented in the workforce, despite legislation to increase diversity.
Working age people with the lowest qualifications are now the most disadvantaged group and the only section of society to actually see a fall in employment levels during the last 10 years. Less than half of this group are now in work and the IPPR is urging employers and voluntary groups to play a stronger role in schemes that help people back into employment.
The report recommends a complete overhaul of the current adult skills policy because, it claims, it is failing to deliver significant employment or productivity gains. It also calls for much more detailed definitions of ‘disadvantaged groups’ so that support can be more targeted for groups such as refugees, the homeless or ex-offenders.
This tallies with research by the Chartered Institute of Personnel and Development which found employers were reluctant to hire core jobless groups such as ex-offenders.
The recommendations are aimed at influencing the 2007 Comprehensive Spending Review, which will set priorities and targets for delivering public services.