Make It Local: local government's vital role in addressing economic activity

Background

While unemployment is currently relatively low, economic inactivity – people aged 16–64 who are not in employment, who have not sought work in the last four weeks and /or who are unable to start work in the next two weeks – the figure has remained around the 8.7 million mark in the UK during 2023. It has contributed to labour market shortages in a number of sectors, reducing their ability to meet customer demand and contribute to growth.

This is an increasingly high-profile issue nationally. Given the role of local government – councils and devolved authorities – in working with their partners in engaging economically inactive and unemployed people through devolved and discretionary employability programmes, the Local Government Association commissioned Shared Intelligence to undertake two parallel streams of work about economic inactivity:

• To research the range of national programmes available to support economically inactive people into work.
• To review the range of action taken at a local level and understand the opportunities and challenges associated with addressing economic inactivity at place level.

Findings

National provision

The research identified a patchwork of 51 national programmes, services or initiatives operational in England, which to some extent, can support specific or particular issues that economically inactive people may need to overcome in being able to find or be ready to work, but very few which are labelled as addressing economic inactivity. New national programmes have since been introduced specifically to address it.

Place-based provision

The desk research identified a range of locally implemented and designed programmes and initiatives to address economic inactivity.  While far from exhaustive, this provides a sample of projects that target economically inactive cohorts and which include different modes of delivery across England and provides insights about what has been successful.

The desk research was supplemented by two deep dives into work addressing economic inactivity in two areas, the North of Tyne Combined Authority area and North East Essex. Each involved a roundtable discussion with local partners, including local government, health representatives and the voluntary sector.

Success factors

Interviews with practitioners at local level, and in the deep dives, indicate that working to reduce economic inactivity is a complex task and often takes time. Individuals who most need support can be difficult to identify, particularly as they may not be in contact with the national benefits system or employment and skills support services. The underlying causes of economic inactivity are often multi-faceted – mixing factors such as family context, mental and physical health conditions, with compounding barriers to do with loss of confidence or self-esteem, or practical factors such as access to transport.

When work is done well with these groups, the benefit is considerable. Available evidence from the deep dives has highlighted how employers welcome recruitment from a broader constituency of potential talent. This is very important with current skills shortages. Local practitioners also see a strong business case for further investment in this support that can reduce the burden on wider public services.

The report identifies some core ingredients or principles that need to be applied to make a success of work with economically inactive cohorts:

These principles aim to capture success factors for effective place-based economic inactivity work. These should also be taken into consideration for future development of national support in this area.

Economic inactivity has been identified as a key issue affecting the UK’s economy. While the country is experiencing historically low unemployment rates, the number of economically inactive people has remained high during 2023, the figure has remained around the 8.7 million mark, according to Office for National Statistics (ONS) figures. This has contributed to labour market shortages in a number of sectors, reducing their ability to meet customer demand and contribute to growth.

ONS defines economic inactivity as referring to people aged 16 – 64 who are not in employment, who have not been seeking work within the last four weeks and/or are unable to start work within the next two weeks. This is a wide cohort. It includes students, early retirees, those with caring responsibilities, and those with poor physical or mental health. It is important to note that economically inactive individuals are different to those classified as ‘unemployed’. Unemployed individuals have been actively seeking work in the past four weeks, are available to start work in the next two weeks, are entitled to out of work benefits including Universal Credit and disability benefits such as Employment Support Allowance (ESA) where relevant.

Not all of the economically inactive cohorts can be seen as ‘addressable’ through policy and programmes and public debate has recognised that some working age groups will be very difficult to bring back into the labour market or have made conscious decisions to leave it. An example of this can be seen in this briefing note from the Resolution Foundation: Post-pandemic participation 21 February 2023.

However, the issue of economic inactivity is increasingly high-profile with implications for labour market shortages. For individuals, there is a risk of impacts on mental and physical health, social inclusion, and financial impacts on the household, which can lead to impacts on both wellbeing as well as spending power locally. Tackling economic inactivity was a theme of the March 2023 budget, referred to as a ‘Back to Work Budget’, as it contained a number of measures aimed at boosting workforce participation. These included significant investment in supporting people with disabilities and/or long-term health conditions to join the workforce, measures aimed at over 50s, as well as supporting parents with childcare costs. Other parties have also set out plans to support people back to work – for example, the Labour Party have set out plans to change how Jobcentre Plus offices work, create flexibility for those training and studying to continue to receive Universal Credit, and introduce further support through treatment centres. 

Local government - councils and devolved authorities - plays a leading role working with its partners in engaging economically inactive and unemployed people through devolved and discretionary employability programmes which in many cases requires joined up or additional interventions (eg health, housing, skills, financial advice). Through its Work Local proposals, the Local Government Association (LGA) has set out the ambition of local government to do more and has made a number of policy recommendations to support this.

However, this is a time of considerable change in funding arrangements to address economic inactivity and unemployment. The European Social Fund, which has supported much local and third sector led activity, is ending this year and local ‘lead authorities’ have been encouraged to use the smaller UK Shared Prosperity Fund (UKSPF) employability funding on economic inactivity for one year only (2024/25). A late change to national policy enabled areas to bring forward economic inactivity interventions in 2023/2024 but can only use year two allocations (2023/2024) for such interventions.

Given that rises in economic inactivity are impacting the economy, it was clear that national government was looking into how public policy could intervene. This, coupled with changes in available local funding and local government’s UKSPF role, led the LGA to commission Shared Intelligence to undertake two parallel streams of work about economic inactivity:

• The first stream explores the range and totality of national programmes available to support economically inactive people into work in England. Here, the research looks to understand the totality of provision, and explores the extent to which the approach is ‘joined up’ across Government departments.
• The second stream explores innovative action taken and support models used locally, primarily but not limited to local government, to work together using local and national levers to tackle economic activity. This also covers the opportunities and challenges associated with addressing economic inactivity at place level.

Two local ‘deep dives’ explore experiences in more detail and draw out success factors associated with local and national programmes.

Both streams of research focus on two broad cohorts:

• People of all ages with physical and mental health conditions, or who have low confidence or suffer from anxiety.
• People who want to work but struggle to access support or feel the system and jobs market is too inflexible (eg carers, older people, people experiencing disadvantage).

This report draws together findings from both streams of research, and the deep dives, and highlights key messages about the nature of provision and principles for successful place-based working.

The research streams were carried out in parallel and involved three strands of activity:

• Desk research to identify the national programmes in scope and a representative selection of place-based activity.
• A small number of interviews with practitioners in local and combined authorities, and national organisations, working on employment and skills and public health.
• Two local deep dives involving a roundtable discussion with representatives from local partner organisations in two areas (North East Essex and the North of Tyne Combined Authority area).

Scope of programmes considered

National programmes

We used the following scope criteria in identifying national programmes:

• Relevant to one or both of the cohorts described in the Introduction, with the intention of improving employability or reducing barriers in access to the labour market.
• Funded by central government, or commissioned by it.
• Delivered to more than one geographical area of the country.
• Active during (2022/2023) the year in which the research was undertaken. We also considered programmes and services announced at the Spring budget (March 2023) which will formally start in 2023/24 (see under Overview of what is changing with the budget).

We did not include the public health grant to local authorities in our list of programmes. This can be used in innovative ways to ensure local needs that link to economic inactivity are met such as on drug and alcohol misuse, health at work and public mental health. However, we made a decision to only include nationally funded programmes where there was a substantive intention for provision to address employment related needs or barriers.

Place-based

We used the following scope criteria in identifying place-based interventions:

• delivery involves local organisations, although funding may be national in some cases or for aspects of programmes
• programmes led by voluntary sector organisations
• because the emphasis of the research is on understanding the criteria for success, we included some programmes that had completed before the 2022/23 financial year where they represent interesting models
• as with the national research, programmes needed to be relevant to one or both of the cohorts described above with the intention of improving employability or reducing barriers in access to the labour market.

While neither list (national programmes or place-based projects) are exhaustive, they provide a snapshot of the current landscape.

The totality of national provision to tackle economic inactivity

The landscape of nationally available programmes

The research identified 51 national programmes, services or initiatives operational in England. Where information was stated, 12 apply UK-wide, eight apply in the whole of Great Britain, with four others also applying in Scotland or Wales. Most of the programmes, to some extent, can support economically inactive people in finding or being ready to work.

Snapshot of national programmes and initiatives

Categorisation of nationally available programmes 

The programmes we identified fit into four broad categories for the purpose of support they offer:  employment focused; education and skills; employer focused; and broad-based support. Figure 1 shows the number of programmes in the different categories and provides examples.  

Figure 1: Employment support programme examples broken down by type.

These 51 initiatives are led by 17 public bodies or organisations, of which 12 are government departments and five are either executive agencies, non-departmental government bodies or organisations commissioned by central government. Department for Work and Pensions (DWP) funded the largest number of programmes (over a third), followed by Department for Education (DfE) who fund 16 per cent and the Ministry of Defence (MOD) who fund 10 per cent. The National Health Service (NHS) supports a further eight per cent. Other departments and authorities leading on at least one initiative include:

• Department for Levelling Up, Housing and Communities (DLUHC)
• Ministry of Justice (MoJ)
• Department for Business, Energy and Industrial Strategy (BEIS)
• Department for Digital, Culture, Media and Sport (DCMS)
• Department for Transport (DfT)
• Office for Health Improvement and Disparities (OHID)
• Education and Skills Funding Agency (ESFA)
• Probation Service
• HM Revenue and Customs (HMRC).

A small number of programmes are funded jointly by government departments including the Supporting Families initiative (DLUHC and DfE), and the Individual Placement Support programmes and Employment Advisors in Talking Therapies programmes (DWP and DHSC). 

The number of government departments and organisations leading on programmes reflects the breadth of the cohorts that make up the number of economically inactive people in the ONS definition. This has important implications for the extent to which national support is joined up and this is discussed further under: To what extent is provision joined-up nationally?

Of the 51 programmes, ten are funded nationally but restricted to selected geographical areas in England. Some of these programmes are in the early stages of development and are being piloted (such as Individual Placement and Support (IPS) - Primary care) whilst other programmes have criteria for places to be eligible, for example the Probation Service Education, Training and Employment programme which is delivered only in London, the North West and West Midlands

Who the national programmes are targeting?

The largest proportion (35 per cent) target cohorts with health conditions (including long-term conditions, disabilities, other physical health as well as mental health conditions). 20 per cent have a broad cohort group (for example advice through the National Careers Service). Some of these programmes, such as the Work and Health Programme include cohorts with health conditions, but are open to others who are vulnerable from different causes including victims of domestic violence. A breakdown of the cohort analysis is shown below.

Figure 2: the range of beneficiary cohort groups that the national programmes target

How programmes are being delivered

We identified a range of delivery routes including: intensive, tailored support to help people find or stay in work; wrap around support in a non-employment service; financial support and broad advisory services.

Figure 3: the range of styles in which support is being delivered

Please note, the percentages do not add up to 100 per cent due to rounding.

Overview of what is changing with the budget

The Spring Budget for 2023 introduced support to help people back to work including disabled people and people with health conditions, parents, over 50s, young people, and unemployed people or people on Universal Credit who could work more hours. It promises a range of policy changes, dedicated support programmes and extensions to existing programmes of funds. Plans include:

• A new Universal Support programme intended to support those with disabilities and long-term health conditions through job-matching, training and other support.
• Extending the 30-hours free childcare initiative to include parents of children aged one and two helping more parents to access the labour market.
• Rolling out the Mid Life MOT tool so more adults on universal credit can plan for their future before retirement.

It also introduced or extended programmes to join-up local services. For example, the embedding of more employment support advisors in mental health and muscular-skeletal services in England and the new Work Well Partnerships Programme pilot which will be linking Jobcentre Plus, health services and other local organisations to provide wrap around support for jobseekers. These announcements suggest an intention by the government to provide more holistic support to improve health and/or remove barriers to enable people to enter the labour market.

To what extent are programmes of support tackling economic inactivity?

A range of programmes can be used to support economically inactive groups although they may not be explicitly labelled as such. Some programmes have potential to support economically inactive groups; others could include support for these groups with some adaptation; while others would require significant amendment to eligibility criteria, but the nature of the support they offer has great potential.

There are 8 programmes that most directly address economic inactivity:

Seven programmes or services use the Jobcentre Plus network to refer or to deliver support to individuals and so are targeting ‘unemployed’ individuals who are closer to the labour market rather than economically inactive individuals. These are:

There are several other programmes which are mainly focused on those who are seeking work but whose delivery style and purpose could equally be helpful for some economically inactive groups:

Others are principally focused on people in work but who face challenges in maintaining their work, often for health or care responsibility reasons. We have included these programmes, since the issue they seek to address in a preventative way can often be a cause of economic inactivity:

Two programmes are not conceived as for economically inactive cohorts but have been highlighted in interviews as being of relevance for the discussion:

Two others are of a much wider focus, but offer the potential to deal with intergenerational causes of economic inactivity:

To what extent is provision joined-up nationally?

When taken together, there is a patchwork of programmes and initiatives that directly or – in many cases - indirectly address economic inactivity.  There is some provision for a range of needs and cohorts and with different purposes (from health to support to employers). However, at least until the March 2023 budget announcement, these have not been tied to addressing a clear set of economic inactivity priorities. The patchwork effect is manifested in several ways, including:

• Tight eligibility criteria: the new IPS Primary Care initiative, for example, was designed for areas with an expectation of a high volume of eligible clients and uses a rigid delivery model that we understand some areas considered would not translate well to their local context.
• Targeting identifiable clients: for example, programmes targeting those who have a disability or health condition often use referrals from health services/practitioners or deliver support in health settings. But there will be many economically inactive people who are not engaging in health services and who are therefore not being identified.
• Having a mix of initiatives with national coverage and those with limited geographical reach: it is notable that three of the programmes we identified as being most squarely focused on economic inactivity are geographically limited in scope (Employment Advisors in NHS Talking Therapies; Local Supported Employment; and IPS primary care).
• Different levels of reach into cohorts that are economically inactive: many initiatives, such as those delivered by Jobcentre Plus prioritise support for individuals who are counted as unemployed rather than economically inactive. Challenges with sharing data from Jobcentre Plus (JCP) to other local providers when individuals are unable to receive JCP support puts these individuals at risk of becoming invisible to other providers who could offer support.

The March 2023 budget has created a new emphasis on economic inactivity. This will lead to new pilots which will aim to improve integration of employment and health support, supporting individuals into employment and to remain in work. It also recognises how certain cohorts are most at risk of economic inactivity – for example, providing assistance for people with musculoskeletal and mental health conditions to get into and stay in work while managing their condition.

Our research also highlights how there is great potential to broaden out the target groups for several of the existing programmes and services to better assist those who are furthest from the job market.

The next section of this report considers how action on economic inactivity is delivered at a local, or place-based level. This identifies several themes with messages for how it can be better joined to national support.

Our desk research looked at a range of locally implemented and designed programmes and initiatives to address economic inactivity.  While not exhaustive, it provides a sample of projects that target the two broad cohorts identified in the project brief and includes different modes of delivery across England.

Appendix 2 shows the full list of place based schemes including summaries.

This section presents our findings on provision for economically inactive people, the varying modes of support in addressing economic inactivity, as well as the different funding models of these programmes.

Cohorts of beneficiaries

People with physical or mental health conditions

A common target cohort is people with physical or mental health conditions, illnesses or diseases given this group makes up over a quarter of economically inactive people.  Examples include:

Young people

Several programmes directly target younger economically inactive people. Examples we found include:

Those facing structural and systemic barriers to finding or maintaining work

Several programmes seek to support people who face multiple barriers to entering the labour market. Examples include:

Relationship with national provision

Our research has suggested there is a large gap in provision for economically inactive people since national provision tends to focus on those who are actively looking for work, and are required to do so through their benefits (see under: To what extent are programmes of support tackling economic inactivity?) There is also a lack of local data about the range of national support being delivered locally for the unemployed and the impact this might have on other local support being delivered. For example, Jobcentre Plus does not share details of people who have been looking for work, and these same groups might eventually become economically inactive.  This makes it difficult to engage with this group. There is therefore a case for flexibility with eligibility requirements so as to encourage programmes to spread organically through word of mouth.

Modes of support

Key worker model

The key worker model is central to many programmes included in this research as a way of building a relationship with clients, allowing the key worker to assess an individual’s strengths and weaknesses and tailor support to their needs. One interviewee felt that this model works best where the key worker is offered the flexibility and power to make decisions themselves, for example being able to provide a free bus pass to someone for whom transport was a barrier to work. Examples include:

Cross-agency working

Including employment services as a ‘wrap around’ support offer in wider services such as housing and health also featured strongly. This helps to reach economically inactive people through touch points in local public services. One interviewee explained how these approaches have been especially successful where NHS partners have been included. Examples include two local implementations of national programmes and a fully locally designed scheme:

Hub approaches

There are several examples of employment and skills hubs, offering visible and accessible sources of multiple forms of support. We have heard that the success of these hubs lies in building provision around what is immediately important to the client. This doesn’t have to be about getting a job right away – in fact, this can put people off. Hubs enable people to access the services they want and through this be introduced to support which helps them towards the labour market. Examples include:

Support to employers

Some of the programmes which we have identified aim to address economic inactivity through providing support to employers. This approach can help to prevent people from becoming economically inactive by protecting the mental and physical health of employees, and help people enter the workforce by ensuring the availability of suitable jobs. Examples include:

Funding models

Below is an overview of different routes to funding place-based programmes, be it through national programme, pilots or devolved funding or from non-governmental sources. This needs to be read with the caveat that some of the categories overlap and often place based initiatives often draw on a range of resources.  

National funding

Some place-based programmes are funded nationally, often as pilots. Particularly common amongst the programmes identified in this research is funding from the DWP, the DHSC or the Work and Health Unit which is jointly sponsored by the DWP and DHSC. Examples include:

Some concerns were raised in interviews about how central funding had constrained the delivery of programmes. One interviewee felt that the need for commonality across pilots elsewhere in the country had restricted the degree to which they could be tailored to local need.

Devolved funding

A number of programmes have received funding at regional or sub-regional level, including through devolved funding. Examples include:

European Structural and Investment Funds (ESIF)

A significant amount of the programmes included in the desk research received ESIF funding, most commonly through the European Social Fund (ESF). Examples include:

Non-governmental funding

A number of programmes have also received funding through non-governmental sources. This has included charitable funding and a significant input from National Lottery Funding. Examples include:

Summary of findings about place-based programmes

Our desk research has identified a range of approaches to place-based work on economic inactivity. Although there is a variety of modes of support, much of the work is delivered in partnership and tries to assemble funding from a range of sources.  Important ingredients include:

• Building on the range of touchpoints that local public services have with economically inactive individuals, finding opportunities to seed employment related support into other work.
• Creating a context where key workers can build trust over time, to identify and begin to address barriers.
• Creating long-term approaches such as hubs that provide a focus for partners to come together, accessible services for clients and as far as possible sustainable models supported through mainstream funding. 

These and other themes are explored in more detail through the two local deep dives.

We undertook two deep dives into how areas are addressing economic inactivity. Each involved a roundtable discussion with local partners, including local government, health representatives and the voluntary sector.

North of Tyne

Context

Addressing economic inactivity is an important theme of the North of Tyne Combined Authority’s (NTCA) vision of a dynamic and more inclusive economy (see Working Together: Our Corporate Plan). Its Employability Plan – Strengthening our Labour Market notes that the labour market is stronger than the wider North East region on several indictors, including qualifications. However, the latest ONS Annual Population Survey showed its economic inactivity rate of 26.1 per cent is higher than both the Great Britain rate (21.5 per cent) and the rate for the North East (26 per cent).

Alongside the plan, NTCA commissioned the Learning and Work Institute to support a call for evidence from cross-sector stakeholders who have been working with economically inactive residents, such as health services, housing providers and the Voluntary, Community and Social Enterprise Sector (VCSE). Challenges identified across these documents include:

• Only half of residents who are deaf or disabled or have long-term health conditions are in employment compared with four in five for residents without health needs.
• High levels of unemployment or economic inactivity among women, ethnic minority groups and residents over the age of 50.
• Low levels of confidence in those residents with lower skills levels and a lack of essential work skills in younger workers.
• The impact of Covid-19 exacerbating existing inequalities.
• Systemic issues such as disillusionment with government agencies and the benefits system.

Programmes to address economic inactivity in the North of Tyne area

There have been a number of local and North of Tyne wide initiatives which have sought to address economic inactivity in the area. A selection of these is summarised:

• Working Well Employability Hub (North Tyneside): a hub providing employment, skills and health services from a range of partner organisations.
• Wise Steps: beneficiaries are provided with one-to-one support from specialists at local partner organisations, including on skills development and confidence building.
• Return to Work Carers: this was a two-year pilot from 2020, established by the combined authority in partnership with local carers’ organisations. Advisors worked with the beneficiaries to identify and address barriers to work, education or training.
• North of Tyne Working Homes: a partnership programme to help unemployed social tenants into jobs, education or training. It ran from April 2019 to March 2023. In addition, New Start, ran with Community Renewal Fund support. This was a partnership of two housing associations (Karbon Homes and Bernicia), together with Your Homes Newcastle and the councils in Northumberland and North Tyneside, with funding to provide tenants over 25 with career starter placements for five months, with wrap around support.
• Newcastle City Council Supported Employment Service: this service helps people to find employment and to stay in work. Support is also provided to employers, including support on interviewing and advice on disability employment.
• Cumbria, Northumberland, Tyne and Wear Individual Placement and Support (IPS) Service: embedded within mental health support and using the evidence-based IPS support model to build relationships with the people using the service and empowering them to find work.
• Bridge Northumberland: National Lottery and ESF funded one-to-one support was provided to unemployed and economically inactive people through a dedicated ‘bridge worker’. Holistic interventions were provided via a number of local VCSE partners.
• Ways to Wellness: a charity foundation that delivers social prescribing for people whose daily lives are affected by certain long-term health conditions. Contracted by the NHS but also involved social investment in its initial years of operation.

What has worked well?

Wrap around support

A key theme of what has worked well in the initiatives in the North of Tyne area has been in linking employment related support to other local public service ‘touch points’ with residents. This wrap around support has been effective in reaching people who, experience shows, may otherwise have been reluctant to approach employment services. For example, in Return to Work Carers, the motivation for engagement is that people want support for their caring responsibilities. From there, the programme has been able to work with those for whom caring creates barriers to employment or training.

Building relationships with clients and longer-term support

Wrap around support is effective because it is not prescriptive, recognises a spectrum of needs and can be tailored. It also lays a firm foundation for building a relationship with individual clients, which can evolve over time and bring in a more focused employment related intervention when the individual is ready to benefit from it. One attendee stressed how this is preferrable to a top-down rigid intervention tied to a timescale. Often, this relationship building works best where employment is not explicitly discussed at early stages of support. This is a feature of Wise Steps and social prescribing, which can promote volunteering as a way to improve personal wellbeing, but also be a stepping stone to work.

This points to the need for support that can evolve over a long period and which allows professional staff with a deep understanding of immediate concerns (for example carers) to work with the clients to allow their wider needs to be uncovered. With local knowledge and expertise, they can also connect the client with other local partners.  Such local flexible approaches are seen as involving ‘power sharing’. This creates a different dynamic that can reach clients who do not respond well to some Jobcentre Plus interventions where there are sanctions for non-compliance.

Community settings

The Working Well Employability Hub in North Tyneside has had almost 3,000 visitors in its first six months of operation. It is located in a shopping centre unit and provides a less formal approach in the delivery of employment support, combined with other services to address multiple barriers. The emphasis is on welcoming environment drop-in sessions and events to promote connection to a range of services and support. Employers also attend to raise awareness of current opportunities supporting the regeneration of the local area. The approach can be contrasted with more formal Job Centre provision. The hub also enjoys the benefits of co-location where different services can easily refer into one another boosting the participation of economically inactive residents.

Partnership delivery

A number of the programmes saw successes in their partnership approaches. One achievement of the Wise Steps programme was the way that support was built around the client but drew in expertise of different partners. The Bridge Northumberland project had placed an emphasis on providing a single entry point to clients to services from a partnership of voluntary and community sector organisations. Northumberland Council was the accountable body. This role helped to create a platform for additional support by connecting the work to funding streams such as the Adult Education Budget.

Employer perspectives

The New Start programme placed 72 people into employment, into new roles with 26 employers. In-work support was a key feature, advising both the employee and the employer. 40 of the clients moved on to permanent roles with their employers at the end of the five-month placement and all obtained a qualification helping them to compete in the labour market. A Karbon Homes video includes the perspectives of several participants and employers. Employer perspectives confirm the importance of the in-work support as a way of releasing potential. They also comment on how the supported programme creates a visible change in individuals’ confidence and self-esteem. One noted how the programme has opened up a new ‘audience’ for its recruitment.

Challenges which have been faced

Linking to mainstream funding

While achievements have certainly been made in collaboration across services, it can remain a challenge to work together using mainstream funding and mainstream services.  Participants described how short-term funding is a barrier when successful initiatives close when funding ends.

However, participants considered that one result of the pandemic had been to strengthen the engagement of public health teams in the employment area by highlighting the connection between work and health. For example, Equally Well,  the North Tyneside Health and Wellbeing strategy for 2021 – 2025, includes far more reference to the role of good work in improving people’s lives than in the previous strategy and a paper was presented to the Northumberland Health and Wellbeing Board on 13 April 2023 about more integrated health and employment support.

Another success was in the Working Homes programme, which had helped make the case for local authorities to invest some Housing Revenue Account money into economic inactivity. This was achieved as the local authorities made the case that this was an appropriate use of HRA as it would help tenants to improve their income, and thus increase the sustainability of their tenancies. However, overall, this was a small step. In a context where local government funding was very tight, simply meeting statutory responsibilities in areas such as adult social care and housing reduced funding available for discretionary support for people who are or are at risk of economic inactivity.

Working alongside national programmes

The North of Tyne Employability Plan seeks to build on a pre-existing joint Employment Framework Agreement with DWP. This is an agreement that NTCA, its constituent local authorities and DWP would work to align local employment support programmes with activities delivered by DWP, including Restart. Workshop attendees noted that challenges remain in ensuring local provision lines up with DWP’s offer. Restart was centrally commissioned support that in practice could be seen to compete with aspects of support provided by local organisations. The contracts did not allow for data about Restart provision to be shared locally and so provide insight about who has been engaged, where and what barriers to employment they have encountered. Joining up this provision better would improve mutual understanding and lead to better collaboration.

Benefits system

The complexity of the benefits system was also seen as a challenge. If potential participants in economic inactivity programmes feared loss of benefits, notably Universal Credit and including specific aspects such as health related entitlements, this discouraged them from participating in some work-related initiatives. One of the local authority participants described how it had been very effective to embed Jobcentre Plus advisers in council services, such as homelessness prevention and an outsourced employability service – this helped to promote understanding in a client focused way.

Future direction

A number of factors were identified that offered opportunities for future effective place-based action.

Working with employers

The deep dive participants broadly agreed that more could be done in terms of working with employers. For example, it was suggested that businesses could assist in developing business cases for supporting initiatives to improve workplace wellbeing. Connected to this is the need to support people who had faced barriers once they have entered employment. This is important as entering work should not be considered the end-point – both employees and employers need to have continued support. The IPS service provides some in work support, and there was support for building it up more widely.

Data

There is also an opportunity to improve the quality of data being collected and to flow this into future policy making. Participants considered that there was an opportunity to improve the quality of overall administrative and labour market data: who are interventions reaching; what were their challenges; what worked well and less well? Building evidence bases together would also be a way to cement North of Tyne based partnership approaches.

Pushing economic inactivity support further into the mainstream

Participants agreed that there was a wide range of local and national services that should have an incentive to work towards removing barriers to work, including the benefits system, housing, public health, the NHS and criminal justice system. Data from the Ways to Wellness programme, which involved a seven-year contract with the NHS and a social impact bond, had identified £2 million of savings due to preventative action. An important focus for future action should be to use evidence from successful programmes to continue to make the case for proactive local action supported through mainstream funds.

Next steps in North of Tyne

A number of approaches to address economic inactivity are set out in the employability plan and in NTCA’s UKSPF investment plan. The key worker model, as explained in the previous chapter will be funded through UKSPF and used to support those with multiple barriers to work. Support will also be provided to those people with long-term health conditions, including through integrated employment programmes. The authority will also work with employers to improve the supply of good quality jobs. This, and the planned North East Mayoral Combined Authority on a seven local authority scale, offers a chance for deeper partnership working and innovation.

North East Essex

Context

The Essex Skills Plan highlights a number of challenges and opportunities in relation to the labour market in the county. Significant labour market shortages have affected all sectors especially care workers, nurses, sales-related occupations and customer service roles.

For the purposes of this deep dive, North East Essex is defined as the area covered by the City of Colchester and Tendring District. The area has a growing population of over 340,000 and a mix of towns, including coastal towns, and rural villages. There are some stark inequalities between parts of the area - for example, there is a difference in life expectancy of 13+ years between the most and least deprived wards. 

The county has a higher rate of economically inactive people who are retired than England. This rate is slightly lower in Colchester, and higher in Tendring. Tendring also has a higher economically inactive rate for people who are long-term sick or disabled. The long-term sickness or disability group has also grown faster in Essex as a whole compared to England (based on figures drawn from Census 2021 – labour market produced by Essex Open Data.

The county has strong levelling up ambitions, described in Everyone's Essex. Skills commitments recognise the importance of working alongside local businesses to help reduce barriers to employment for disadvantaged groups. Access to employment is recognised as an important issue in the commitments on the economy, promoting independence and health.

In North East Essex specifically, the area's Health and Wellbeing Alliance brings together the local NHS, local authorities, public health, third sector and community partners with objectives of tackling the complex issues that lead to health inequalities, ultimately working in collaboration to reduce these inequalities. Addressing economic inactivity is an important facet of its work on the wider determinants of health, and this case study assesses some of the approaches used in the area.

Programmes and initiatives to address economic inactivity in North East Essex

A number of local initiatives have sought to address socio economic factors that link to economic inactivity, a selection of which are summarised below:

• NE Essex Health and Wellbeing Alliance activity: the Alliance has been in existence for over eight years and is building on the requirement on Integrated Care Boards (ICBs) to act on economic and social development. For working age people it emphasises mental health, and supporting people to maintain healthy, productive and fulfilling lives.
• Clacton Place: this programme included an element of peer support. The local Community and Voluntary Sector (CVS) organisation recruited ‘peer workers’ to engage with users of mental health support charities and help them with social engagement, with the aim of moving them closer to training or work.
• SOS bus: this is an outreach vehicle which operates with partner agencies to provide quick access to health and wellbeing support. It is also used for a local jobs and careers roadshow.
• Community and Voluntary Sector led activity: key organisations are CVS Tendring and Community 360 in Colchester. Both work closely with a wide range of community organisations and encourage people to attend activities (from job clubs to walks) and place a great emphasis on the value of volunteering as a bridge into work. Community 360 is closely involved in providing the multi-agency One Colchester community hub.
• Tendring Mental Health Hub: the Hub is housed within Citizens Advice's 'Community Clothing' shop in Clacton and provides opportunities for people with mental ill-health problems to volunteer in the shop. It has support from the county and district councils, NHS and the Police, Fire and Crime Commissioner for Essex.
• Essex Pedal Power: led by Active Essex, this is an initiative to make cycling more accessible to people living in Clacton and Jaywick Sands. 1,200 free new bikes have been available over two years since July 2021 to eligible residents with some wrap around support and incentives to use them. It aims to improve physical and mental health but also to help people with access to new employment, training and education opportunities. The initiative can provide bikes through social prescribing and also has a priority scheme in place with the local JobCentre Plus.

These initiatives are in addition to core and locality focused work through Essex County Council and its partners in the Anchor Network, which emphasise access to training and work, and helping people to stay in work. 

What has worked well?

‘Piggyback’ approach

The experience in North East Essex is that initiatives seeking to engage with economically inactive residents work best when they work through people's regular touch points with familiar community services or activities. Partners term this 'piggybacking' on existing services or amenities.  In practice this includes:

• Working as part of existing multi-purpose community service hubs (for example the One Colchester hub).
• Using the SOS bus to host the jobs and careers fairs in Tendring. The vehicle is well-known and this reduces the risk of a perception of stigma associated with visiting it.
• Signposting from tenancy meetings with social landlords.

The ‘piggyback’ concept creates a context for an initial conversation where topics of learning and work can be broached from a wider wellbeing point of view. This approach is felt to be effective for individuals who may have had negative experiences of learning at school or who lack family role models for work.

Volunteering

Volunteering has been a very effective bridge from economic inactivity to work in the area. Both CVS Tendring and Community 360 work to recruit volunteers to work in community assets, such as charity retail shops. The training associated with this naturally moves volunteers closer to being able to contemplate economic activity. Partners stressed that careful support and mentoring is needed. Both organisations work to buddy vulnerable volunteers with more experienced peers or staff members. They are encouraged to join social events and to take steps towards achievable progression goals.

A similar model is used by the Tendring Mental Health Hub. In a year-long placement, the aim is for volunteers to learn retail and customer service skills, as well as participate in other activities tailored to their interests. 

Beneficiary perspective

We heard how former volunteers grew in confidence which moved them closer to the labour market. For example, a survivor of domestic abuse was referred by social prescribing to volunteer in a friendship café. They gradually increased their hours as their confidence grew and now have a paid job.

Wider wrap around support

The importance of wrap around support has also been seen in delivery of the county council’s Adult Community Learning (ACL) service. The experience is that even following a positive initial conversation about wanting to upskill, there is still distance to travel from intent to the classroom and on to completion.

Working with community strengths

Building trust and working with the community is seen as of central importance in North East Essex. The area has been the subject of a range of national initiatives which tend to be time-limited and top-down and can miss important opportunities to understand local need and expertise, and importantly are not there long enough to build trust and relationships.

An initiative such as Essex Pedal Power has generated good local ownership and buy in. The scheme involves local community groups and led on to the formation of new community cycling groups, a cohort of locally based volunteers, and associated social activities.

A 'strengths based' approach is at the heart of the way of working of the North East Essex Health and Wellbeing Alliance. It consciously seeks to understand what provision already exists and works in its communities and works alongside it.  Experience is that presenting the challenges faced in an area as negative factors to be solved is alienating - a positive, strengths-based approach is important for trust and engagement. Partners also stress the importance of consistent long-term partnerships. This is a route that can build trust and offer flexible support - which are critical factors when working with individuals for whom barriers to work are multiple and complex.

Challenges which have been faced

Transport

Transport remains a challenge in North East Essex. Community transport is over-subscribed and train travel between Clacton and Harwich requires two changes. With low car ownership rates in some areas, this highlights the importance of an initiative such as Essex Pedal Power and previous initiatives involving light motorbikes. Associating this with training, and in the case of Essex Pedal Power, some improvements to cycling infrastructure has given some mitigation to the transport related barriers to training and work that are common in non-metropolitan areas.

Multigenerational joblessness

This is an issue in parts of the area. The family learning and parent ambassador programme is working with parents and carers to support them to support their children. The aim is to work with parents so that they can be ambassadors for learning for their children and raise aspiration as a family.

Digital exclusion

Many economically inactive people only have access to one digital device, a smart phone, and this presents challenges for completing job applications, in some cases in navigating websites and with data costs. Public Wi-Fi and computers in libraries or community hubs can mitigate such problems. Digital exclusion of older economically inactive people, who may lack digital skills even if they have a device, is also an issue.

National and local alignment

Achieving alignment between national programmes and local provision. There are examples where nationally commissioned programmes, led by DWP, have overlapped with the work of other partners, which both target similar client groups while leaving gaps for other clients where there is no programme.

Future direction

In discussion, a number of factors were identified that offer opportunities for future effective place-based action.

Community hubs

There are active proposals to create new community hubs, aiming to piggyback employment related support on to more general advice requests.

Cross agency collaboration

Participants considered that there was an opportunity to extend existing cross agency collaboration in respect of health and care job opportunities to wider public and voluntary sector jobs. There would be an opportunity to gain economy of scale in training and wrap around support, but also to cross refer candidates.

Locality plans

Partners will continue to develop locality plans aiming to design complementary provision across agencies, focused on very local needs. One further piggyback opportunity concerned Freeport East. This had its own skills plan and there was an opportunity to develop an action plan to link to this.

Next steps in North East Essex

One important factor could be a Greater Essex devolution deal. The Greater Essex Devolution: Expression of Interest submitted to the Government asks for involvement in the design and delivery of DWP contracted employment programmes, including adult upskilling/reskilling and employability support. The intention would be to integrate DWP support much more closely with local provision to match it to local needs, which vary even within North East Essex.

The expression of interest also seeks devolved responsibility for the commissioning and funding of education and training for 16–19-year-olds in further education and for adults aged 19 and over through the application of the Adult Education Budget (AEB). Importantly, the AEB would not be ringfenced for specific purposes and so could be used for wider employability initiatives if the deal is successful.

There is also a clear desire, within the North East Essex Health and Wellbeing Alliance and among county partners more widely, to connect this discussion with the growing focus on the wider determinants of health and ICS responsibilities in relation to socio-economic development. In North East Essex specifically, the Alliance is interested in looking at memorandum of understanding arrangements to underpin place-based action, facilitate closer working using mainstream budgets and ideally to draw in more partners.

Our desk analysis shows that there is a patchwork of national provision that can address economic inactivity. In the last financial year, and including initiatives in detailed pre-implementation planning prior to the March 2023 budget, there were few programmes that can be considered as directly addressing economic inactivity. Many more address it either peripherally or offer a mode of intervention that could be adapted to address it. However, there has not been a unified approach tied to economic inactivity priorities.

This is changing – the March 2023 budget includes new initiatives to join up health and work services for disabled people and people with health conditions. There are new schemes to help over 50s return to work and additional childcare support for parents. The Government has also announced that People and Skills priority interventions under UKSPF could begin in 2023/24, rather than 2024/25 as originally expected.

Interviews with practitioners at local level indicate that working to reduce economic inactivity is a complex task and often takes time. Individuals who most need support can be difficult to identify, particularly as they may not be in contact with employment and skills support services. The underlying causes of economic inactivity are often multi-faceted – mixing factors such as family context, mental and physical health conditions, with compounding barriers to do with loss of confidence or self-esteem, or practical factors such as access to transport. Local knowledge is essential to direct available resources to where they are most needed and can have most effect.

When work is done well with these groups, the benefit is considerable. Available evidence from the deep dives has highlighted how employers welcome recruitment from a broader constituency of potential talent. Careful wrap around support also helps to build up clients’ confidence reducing barriers to entering training and eventually the labour market. This is very important with current skills shortages. Local practitioners also see a strong business case for further investment in this support that can reduce the burden on wider public services.

From our review of place-based practice, and the deep dives, it is clear that local government – councils and devolved authorities – is using its local expertise alongside its role as democratically elected leaders, trusted convenors, place shapers and leading members of Integrated Care Boards to bring partners together to address economic inactivity and unemployment. It does this because it wants to avoid the damaging impact this can have on people’s prospects, household incomes, health and wellbeing, on local communities and the wider local economy.  We have therefore identified some core ingredients or principles that need to be applied to make a success of this work:

Looking at the breadth of national provision, our desk research suggests that there is scope to consider how some of the programmes that are only peripherally able to support economically inactive people could be broadened out. However, our deep dives into local experience on the ground also emphasise that it can be difficult to integrate national and place-based work. National objectives do not always match local needs. Contracts for externally commissioned delivery inhibit data sharing. This can hold true even when there is strong local will from DWP/JobCentrePlus to work in partnership and where there are practical examples of local collaboration.

The seven core principles described above aim to capture success factors for effective place-based economic inactivity work. These should also be taken into consideration for future development of national support in this area.

List of interviewees and deep dive participants

• Matthew Ainsworth – Salford City Council
• Fiona Aldridge – West Midlands Combined Authority
• Matthew Ashton – Liverpool City Council, Director of Public Health
• Shona Duncan – Tees Valley Combined Authority, Head of Education, Employment and Skills
• Vikki Walters – Gloucestershire County Council, Strategic Lead for Inclusive Employment – Gloucestershire Employment and Skills Hub
• Michael Wood – NHS Confederation, Head of Health Economic Partnerships

 North of Tyne deep dive

• Sharon Alexander – CVS Tendring; Chief Executive
• Laura Bernard – North East Essex ICB
• Kirstie Cochrane – University of Essex; Deputy Director, Enterprise
• Louise Denyer – Essex CC; Localities lead – Colchester and Clacton
• Lee Heley – Tendring District Council; Corporate Director for Place and Economy
• Lisa Jarentowski – Essex CC; Adult and Community Learning
• Sam Jones – Essex CC; Localities lead sustainable growth and Freeport East
• Nadia McLeod– Essex CC; Senior Strategy Advisor

The following table shows the full list of place based schemes: