Quarterly Skills and Employment Bulletin

GREATER MANCHESTER QUARTERLY SKILLS & EMPLOYMENT BULLETIN July 2014

KEY STATISTICS AT A GLANCE RATE Total GM GM LABOUR MARKET

UK

AN. CHANGE GM Total Change %

DATE

APR13MARCH14 APR13MARCH14 APR13MARCH14 APR13MARCH14 APR13MARCH14 APR13MARCH14 JAN-DEC 2013

1,182,900

67.8%

1

71.6%

+6,700

+0.6%

↑

Full-Time Employment

887,400

75.0%

74.1%

+7,600

+0.9%

↑

Part-Time Employment

288,300

24.4%

25.4%

+1,000

+0.3%

↑

Self-Employment

151,000

12.8%

13.7%

+18,900

+14.3%

↑

Temporary Employment

65,500

5.4%

5.3%

+200

+0.3%

↑

UNEMPLOYMENT

114,200

8.8%

7.3%

-9,300

-7.5%

↓

ECONOMICALLY INACTIVE (16-64)

448,700

25.7%

22.7%

+8,600

+2.0%

↑

VACANCIES

18,236

N/A

N/A

-6,436

-26.1%

↓

OCT-13

-19,190

-6.2%

↓

NOV-13

-22,290

-8.6%

↓

NOV-13

EMPLOYMENT

BENEFIT CLAIMANTS 2

13.3% (GB) 10.6% (GB)

ALL BENEFIT CLAIMANTS

291,630

16.6%

OUT OF WORK BENEFIT CLAIMANTS

238,010

13.5%

JSA CLAIMANTS

51,870

3.0%

2.5%

-26,725

-34.0%

↓

JUN-14

LONG-TERM JSA (12 months+)

15,605

0.9%

0.8%

-6,565

-29.6%

↓

JUN-14

18-24 year old JSA CLAIMANTS LONG TERM YOUTH JSA CLAIMANTS (18-24 year old, 12 months+) ESA/IB

11,580

4.2%

4.0%

-9,160

-44.2%

↓

JUN-14

1,935

0.7%

0.7%

-1,575

-44.9%

↓

JUN-14

140,950

8.0%

6.2% (GB)

-2,840

-3.9%

↓

NOV-13

115,250

6.5%

5.1% (GB)

-6,390

-5.3%

↓

NOV-13

9,460

0.5%

0.4% (GB)

+810

+9.4%

↑

NOV-13

5,650

0.4%

0.4% (GB)

+160

+2.8%

↑

NOV-13

27,030

1.5%

1.2% (GB)

-950

-0.1%

↓

NOV-13

8,880

2.4%

2.0% (GB)

-810

-0.1%

↓

NOV-13

LONG-TERM (12 months+) ESA/IB 18-24 ESA/IB CLAIMANTS LONG TERM YOUTH ESA/IB CLAIMANTS (18-24 year old, 12 months+) LONE PARENT IS 18-24 LPIS CLAIMANTS

1

Percentages in relation to employment, unemployment and economic inactivity are expressed as proportions of the working age population (16-64 year olds). Percentages in relation to employment status are expressed as proportions of those in employment.

2 All percentages in relation to benefits refer to proportions of the working age population (16 to 64 year olds).

01

WORK PROGRAMME (WP) WP REFERRALS (monthly)

1,350

N/A

N/A

-730

-35%

↓

MAR-14

WP ATTACHMENTS (monthly)

1,410

N/A

N/A

-709

-36%

↓

MAR-14

WP JOB OUTCOMES (monthly)

17,810

N/A

N/A

+16,950

N/A

↑

MAR-14

EDUCATION & SKILLS NEET 16-18

3,736

5.0%

4.6% (ENG)

- 889

-12%

↓

MAR-14

EET 16-18

70,931

93.0%

92.0% (ENG)

2,827

+6.8%

↑

MAR-14

25,388

83.4%

81.1% (ENG)

766

0.6 %

↑

2012/13

18,204

59.8%

58.6% (ENG)

927

1.7%

↑

2012/13

GCSE - % of pupils achieving 5+ A* - C grades GCSE - % of pupils achieving 5+ A* - C grades inc. Eng. and Maths

*For a more detailed breakdown of the data, including at local authority level, please click here. The link will download an excel file where local authority specific data can be viewed, as well as detailed Work Programme statistics.

UNEMPLOYMENT MOVING IN THE RIGHT DIRECTION  The latest figures show that 51,870 people were claiming JSA in GM in June 2014 – a decrease of 9,465 (-15.4%) on a quarterly basis. As a proportion of the resident working age population, 3.0% of people in GM were claiming JSA in June 2014 – a higher figure than the North West (2.7%) and UK (2.5%). Youth claimants experienced a quarterly decline of 21.4% (3,145 fewer young people), with the 18-24 claimant rate standing at 4.2% in June 2014.  The number of GM residents claiming any type of out-of-work benefit has fallen. This is mostly driven by falls in JSA claimants, but also ESA/IB and LPIS claimants, which have experienced annual declines of 3.9% and 12.6% respectively. However, young (18-24) ESA/IB claimants – and especially long-term young claimants – are the exception.  There were 18,236 job openings in GM in October 2013, down by over a quarter (-6,400) on the same month last year. The highest proportion of vacancies were in professional occupations (27.5% or 5,020). The fall in vacancies (sourced through Labour Insight, an online tool for analysing job adverts) is believed to be due to improvements in the accuracy of the software.  Full-time employment appears to be returning for the first time since the recession (up 0.6%).

However, the year to March 2014 saw a large increase in self-employment of 14.3%. More than twice as many self-employed workers entered the labour market over the period as those with standard contracts of employment (full-time or part-time).

WORK PROGRAMME PERFORMANCE STILL BELOW EXPECTATIONS  In March 2104 there were 1,350 referrals to the Work Programme in Greater Manchester, with 17,810 job outcomes.  Whilst JSA referrals have fallen since the start of the programme, ESA referrals have been rising.

JSA job outcomes continue to constitute the largest proportion of all outcomes. Only the JSA priority groups have seen an increase beyond minimum performance levels. ESA flow performance levels remain below expectations.

02

GREATER MANCHESTER’S GCSE PERFORMANCE HIGHER THAN AVERAGE  GCSE results for the 2012/13 academic year show an improvement in the proportion of students achieving 5+ A*-C grades including English and Maths (59.8%). This compares to 58.6% nationally.

Commentary: Should we trust the claimant count as a measure of unemployment?

Stephen Overell, Principal, Employment and Skills It’s billed as the government’s boldest welfare reform and it’s been dogged by ceaseless controversy. But many more people will start to receive universal credit (UC) payments in the north west this summer.

Greater Manchester (GM) has more experience with UC than anywhere. Most of the 7000 people who have received UC since the beginning of the ‘pathfinders’ experiment in April 2013 are from GM, living in Oldham, Wigan and Tameside. Job centres in Stockport, Bury, Salford, and Bolton will introduce it next, prior to national roll-out.

What have we learnt? UC folds six different benefits and tax credits into a single payment, covering both in-work and out-of-work entitlements. According to the sparse statistics released by the Department of Work and Pensions covering the period up to April 2014, 60% of them are men and 52% are under 24 years old. The majority are unemployed - but it is impossible to say exactly how many. The Office for National Statistics does not plan to announce until the autumn how to distinguish out-of-work claimants from people in jobs who are also receiving credits and benefits.

Yet it is clear that UC has affected the claimant count. The districts running pathfinders have generally experienced the largest falls in JSA claimants. In the year to June 2014, Oldham’s JSA claimants fell by 48%, Wigan’s by 38.9% and Tameside’s by 39.8%. In GM as a whole they fell by an average of 34%. At the end of April 2014 (the numbers will have risen since), Oldham had the most recipients of UC in the country (1690), Wigan had 1,260 and Tameside 870. The effect of an improving economy on unemployment levels has thus been inflated by UC. GM’s true population of jobless claimants is really about 4000 higher than the JSA data suggests – approximately the equivalent of the (unusually large) fall in claimants between May and June 2014.

Is there a connection between UC and benefit sanctioning? Receiving an ‘adverse’ sanction (there is a system of appeals) entails a loss of benefits for four weeks, 13 weeks, 26 weeks or up to three years, depending on the ‘offence’ (most commonly missing interviews, including appointments for the Work Programme). Out of 51 job centres in GM, the areas trialling UC are prominent among the top ten sanction issuers. Oldham tops the list (also number six nationally); Wigan is fifth; Tameside is seventh. All UC claimants must sign a Claimant Commitment, which sets out what they must do to find work in order to receive UC – and the possibility of sanctions if they don’t.

Being sanctioned does not mean being removed from the jobless totals. Yet it does increase the likelihood that people will decide their claim is not worth pursuing, or they miss appointments, effectively ending their entitlement. In December 2013, 6,960 adverse sanctions were issued; therefore, approximately 11% of JSA claimants were sanctioned. Some may be incentivised to find work as a result, but some may simply vanish off the radar. The use of sanctioning does not seem to be decreasing now that JSA totals are falling back towards pre-recession levels.

Between sanctioning and UC, JSA data is a less faithful representation of the health of the labour market than it once was.

03

DEFINITIONS Economic Inactivity Inactivity rates refer to the proportion of the defined population that are unable to enter the labour market. This may be due to the fact that they are of working age but in full-time education; they are unable to work due to incapacity; they are looking after a family member or home; or that they have taken early retirement. Importantly, they also do not satisfy the criteria for being ILO unemployed.

That is, they are not in work, but do not want a job, have not sought a job in the last four weeks, or are unavailable to start in the next 2 weeks.

Employment Support Allowance/Incapacity Benefit/Severe Disablement Allowance (ESA/IB/SDA) Claimants in receipt of contribution based incapacity benefits. To have qualified for IB/SDA claimants must have had a personal capability assessment of their ability to work. Those individuals that cannot work, are of working age and have made enough National Insurance contributions can claim IB/SDA. No new claimants are now allowed to claim IB/SDA – instead they are directed to claim Employment Support Allowance (ESA). All current IB/SDA claimants will be re-assessed in line with the ESA requirements for claims. A long-term claimant refers to individuals who have been claiming IB/SDA for over one year.

ILO Unemployment ILO unemployment is the International Labour Organisation’s definition of unemployment: that individuals do not have a job; want a job; are seeking or have sought a job in the past 4 weeks; and are able to work within the next 2 weeks. The rate is given as a percentage of the economically active population. It is the Government’s preferred measure of unemployment.

Jobseeker’s Allowance Jobseeker’s allowance (JSA) is the most common unemployment benefit. It is mainly paid when eligible individuals don't have a job and are looking for work. However, in certain circumstances it can be claimed by individuals that are in work but working less than 16 hours a week. There are two types of JSA: (1) 'Contribution-based Jobseeker's Allowance' which is paid at a standard rate if individuals have paid or been credited with enough class 1 National Insurance contributions; and (2) 'Income-based Jobseeker's Allowance' which is based on individuals' income and savings and is paid at a rate based on individual circumstances. A long-term claimant is normally defined as someone who has claimed JSA for more than 6 months, but 12 months is used in the data above.

Lone Parent Income Support Since May 2008, a lone parent can receive income support if they: have at least one child under 12; are between 16 and 59 years old; have a low income; work less than 16 hours a week; are not studying full-time (with the exception of those taking up to an A-level standard); do not claim JSA; and do not have savings above £16,000. From October 2009 the age of the child for which individuals can claim this benefit has been coming down, and since October 2011 has been 5 years old.

Working-Age Population Rates were previously calculated based on the female age 16-59 and male age 16-64 population.

This has now changed to include all 16-64 year olds.

04

SOURCES JSA Claimant Rate Source: Claimant Count – Rates and Proportions, ONS, 2014 Youth JSA Claimant Rate Source: Claimant Count – Age and Duration, ONS, 2014 Long-term JSA Claimant Rate Source: Claimant Count – Age and Duration, ONS, 2014 NEETs Source: National Client Caseload information system, 2014 (password required) WORKLESSNESS and BENEFITS Claimants Source: Work and Pensions Longitudinal Study, DWP, 2014 ESA/IB Claimants Source: Work and Pensions Longitudinal Survey, DWP, 2014 Lone Parent Claimant Source: Work and Pensions Longitudinal Survey, DWP, 2014 ILO Unemployment Rates Source: Annual Population Survey, ONS, 2014 ILO Employment Rates Source: Annual Population Survey, ONS, 2014 Inactivity Rates Source: Annual Population Survey, ONS, 2014 GCSE Results Source: GCSE and equivalent results including key stage 3 provisions, DfE, 2014 Work Programme Source: DWP Tabulation Tool, DWP, 2014

05