Reversing Osborne’s cuts to employment support offers the Chancellor an easy win

What with Brexit, the recent US Presidential Elections, the deficit and a productivity crisis, it will be tempting for the Chancellor of the Exchequer to focus solely on the big picture items in Wednesday’s Autumn Statement.  He must avoid this temptation.

Alongside the challenges, the Autumn Statement also provides the new Chancellor with an opportunity to secure an easy win, by rowing back on his predecessor’s misguided cuts to employment support. The Chancellor should instead take this opportunity to invest in disabled jobseekers, thereby aligning the Government’s words with actions, while also securing substantial Exchequer savings in the long run.

Last month, ERSA published More than Words, an independent report by WPI Economics, which assessed the Government’s planned investment in employment support. The report demonstrates that following the former Chancellor George Osborne’s Autumn Statement in 2015, specialist employment support is likely to be reduced by 80% from next year.

The report shows that the reduction in funding – from £750 million in 2013/14 to less than £130 million next year – means that while 300,000 disabled people accessed contracted support between 2012-2015, this will fall to just 160,000 disabled people from 2017 to 2020.

Given the above figures, it was hardly surprising that MPs on the Work and Pensions Select Committee used their report into the future of Jobcentre Plus (JCP) published earlier this month, to voice similar concerns. Not only did the Committee express concern about the ‘manifold reduction’ in external support that the Work and Health Programme represents, it also raised doubts about the capacity of JCP to respond to the resulting increase in pressures. At a time where there is a very real possibility of a labour market downturn, this is especially worrying.

The planned reduction in funding makes no business sense and reversing the decision would be an easy win for the new Chancellor. 

In fact, economic modelling demonstrates that doubling the planned size of the Work and Health Programme (still less than 50% of current spend), would not only give an extra 160,000 disabled people access to specialist employment support, but would also accrue wider savings of around £280 million to the Exchequer.

Earlier this month, the Government published its Work and Health Green Paper, which reaffirmed its commitment to halving the disability employment gap.

And so if the case is clear for the Treasury, it should also be clear for the broader Government.

Reversing George Osborne’s cuts would signal that the Government is serious about its commitment to halving the disability employment gap – a target that will require over 1.2 million more people with disabilities to enter work.

It is of course not all about Government investment and one area that offers significant opportunities is devolution, where some areas such as Greater Manchester are leading the way in delivering place-based integrated solutions. However, Government investment is a crucial part of the puzzle, and would provide the signal that there is genuine commitment to supporting disabled jobseekers into work. 

The Chancellor must seize this opportunity to reverse the misguided decision made in last year’s Autumn Statement. The Chancellor can match words with actions, saving the Exchequer money, and benefiting both disabled jobseekers and businesses.

Kirsty McHugh, Chief Executive of the Employment Related Services Association (ERSA)