A complex variety of schemes that should support the economically inactive back into work do not meet the needs of people affected and will fail to boost growth, councils have warned.
Research commissioned by the Local Government Association (LGA) found many risk being left out of the labour market as the 51 national job support programmes identified are not joined up and few address economic inactivity specifically.
Figures published by the Office of National Statistics show about a fifth of adults aged 16 to 64 in the UK, totalling 8.7 million people, were economically inactive between May and September.
The number of these people classed as economically inactive due to long-term sickness grew to a record level of 2.5 million, an increase of 400,000 since the onset of the pandemic.
Economists warn the resulting restriction on labour supply has limited productivity and undermined efforts to boost sluggish economic growth.
The Government has defended its efforts to tackle the problem.
In September, Work and Pensions Secretary Mel Stride said overall economic activity in the UK is below the average across comparable countries and levels have fallen by 360,000 since the pandemic peak due to Government policies.
However, the Labour-led LGA said a new approach would significantly boost progress.
It noted that many people who are fit for work and want a job are not eligible for support from jobcentres as they do not claim out-of-work benefits, leading to vacancies remaining unfilled.
The LGA called for better collaboration across Whitehall departments and between the Government and councils in order to respond effectively to the often complex reasons why people are economically inactive.
These can include physical and mental health conditions, loss of self-esteem, access to transport or a need to learn new skills.
The report by Shared Intelligence called for councils to be given a leading role in assisting people back to work in their areas, backed by simplified and long-tern funding arrangements.
Economic inactivity does not have a quick fix and short-term, limited schemes will not be enough to get millions of people back into work.— Martin Tett, chair of the LGA's people and places board
This would enable eligibility to be broadened and support linked to existing frontline council services such as public health, housing and adult learning, as well as the NHS, it added.
Martin Tett, Conservative chair of the LGA’s people and places board and leader of Buckinghamshire Council, said: “Economic inactivity does not have a quick fix and short-term, limited schemes will not be enough to get millions of people back into work.
“Councils know their communities best and can use their unique coordinating role to tackle this fundamental national issue and its underlying causes.
“Given the right powers and funding, local government can do so much more to unlock the labour market, join up support and boost economic growth”
The report found that the 51 national initiatives identified are led by 17 public bodies, of which 12 are Government departments. The remainder are either executive agencies, non-departmental bodies or organisations commissioned by the Government.
The Department for Work and Pensions funded more than a third of the initiatives, with the others led by the Department for Education, the Ministry of Defence and the National Health Service.
A Government spokesperson said: “Our drive to get more people into jobs and grow the economy is paying off – inactivity has fallen by more than 200,000 since the pandemic peak – but we are determined to help everyone fulfil their potential through work.
“That is why we are investing an extra £3.5 billion into the next generation of welfare reforms, to help thousands into jobs, grow the economy and halve inflation. This includes tailored one-to-one, expert help at our Jobcentres, where we’re working with employers, the NHS and other partners to provide joined-up support, break down barriers and get Britain working.”
