Response to Department for Work and Pensions call for evidence and good practice on in-work progression
Ashwin Kumar, Katy Jones
This paper sets out the response of researchers at Manchester Metropolitan University to the Department for Work and Pensions (DWP) call for evidence and good practice on in-work progression. The DWP's focus on in-work progression is welcome, given high and rising levels of in-work poverty and underemployment in the UK. The consultation document’s emphasis on both higher quality work and higher wages is a welcome shift from previous DWP approaches based on getting claimants into any job and, once in work, on increasing hours. Focusing on increasing the hourly rate of low-paid workers is better for UK productivity, better for well-being, and autonomy, and recognises the reality that many people on low incomes have to balance work with caring commitments for children and disabled relatives.
However, we should not underestimate the scale of change required. The DWP’s approach has been characterised by a ‘work first, and then work more’ approach where the focus for out-of-work claimants has been on entry into work and not on the quality of work or the prospects for progression. Similarly, for in-work claimants, earlier trialling of in-work interventions (DWP, 2018b) and the current guidance to employers (DWP, 2018a) have put a heavy emphasis on increasing the volume of work, and not on improving hourly rates of pay.
The DWP’s new emphasis on higher quality work and higher wages must therefore translate into practice on the ground. This requires change in DWP policies, practices, and the way it measures the success of its Active Labour Market Policies. For example, it is important that the DWP’s performance management and performance indicator regime reflects the value of job entry at higher wage rates (or the potential for these).
It is important that statistical information on the success or otherwise of its activities includes measures that capture the effectiveness of job matching and entry into jobs with potential for progression. Crucially, short term benefits to Annually Managed Expenditure (AME) resulting from the emphasis on entry into any job, and increasing hours, must be balanced against the contribution to longer-term productivity of faster progression for low-paid workers and better health and well-being, as well as reductions in longer-term fiscal expenditure.
Kumar, A. and Jones, K. (2020) In-work progression: Response to Department for Work and Pensions call for evidence and good practice on in-work progression, Manchester, Manchester Metropolitan University