The Government are looking into why there are so many economically inactive people claiming state benefits when there is low unemployment, record vacancies, and employers are finding it difficult to fill certain vacancies. They seem to think that the way the benefit system is set up, is making people risk averse.
There are many reasons why people may be reluctant to take jobs, but I don't think, that trying to live on just over £77 Jobseeker's Allowance or Universal Credit, is one of them. This is what a single person over 25, would receive each week along with help with rates and Housing Benefit.
Rates of pay are an obvious factor. Some 41% of people claiming Universal Credit are already in work and that includes people who work for the DWP in their Jobcentres. Although, we have a National Minum Wage (NMW) in Britain, a great deal of the work available can be through agency's or temporary or part-time. It has become increasingly difficult for people to obtain decently paid, full-time, secure paid employment, but this varies in different parts of the country. Many people can be working on zero hour contracts and the NMW, for many workers, has become the going rate for a job, rather than a state guaranteed minimum wage.
The lack of employment protection is also another factor. For most people employed after 6 April 2012, the qualifying period for claiming unfair dismissal is now 2 years, unless they're dismissed for an "automatically unfair" reason. This means that employers can dismiss someone at will or on a whim, and there is little that you can do about it.
If you left your job voluntarily, and claimed unemployment benefit, you would have to show just cause or a good reason for leaving your job. If you fail to do so, the DWP could refuse you unemployment benefit for 3 months or even longer depending on the circumstances. If that happened your only option would be to try and claim an hardship payment. If you're sacked, you would have to show this wasn't for "misconduct" which is interpreted very widely and includes conduct that is reprehensible, blameworthy, and wrong. If you can't surmount this hurdle you will be refused unemployment benefit for a specified period.
People in receipt of benefits, may consider it risky to take some jobs because if they're dismissed or leave because they don't consider it suitable, they could finish up without any income, state benefits, and homeless, because that is how the system works to penalize people.
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Following the chancellor's Autumn statement of the intention of the DWP to interview the 600,000 UC claimants who are in work, but not working their expected hours. I would anticipate an avalanche of presentations related to benefit sanctions being imposed. This scenario is likely to play out, as the Work Coaches are likely to be instructed to be assertive in enforcing the conditionality requirements that each claimant has in his/her claimant commitment.
The expected hours requirement applies to each UC claimant. It means that each claimant starts with a requirement to work for 35 hours per week. Then deductions from that level of requirement can be made based on individual assessments. So for example the expected hours can be reduced for child care/disability ect.
The issue of vacancies not being taken up is occurring for many reasons. Many single parents like to work part time in order to facilitate the care needs of their children. The barrier to working full time is often related to child care costs. The same with claimant's who have a disability, They may be only able to manage so many hours per week. One of the other issues is the mismatch between the skill base of the unemployed and employer requirements. It seems self -evident to me that there needs to be a planned skills training programme available to the unemployed. One that matches the skills gap that is evident in many industries- building being a prime example.
I read some time ago that over the next twenty years 80% of all the jobs created in the Uk will require skills in the STEM subjects. The lack of graduates in these subjects highlights the mismatch that I refer to.
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