The big picture challenge of low pay

13 February 2015

Kirsty McHugh, the Chief Executive of the Employment Related Services Association (ERSA) discusses NIACE’s proposals for a new National Advancement Service to help low-paid people progress in their careers.

Well hats off to NIACE – the snappily entitled National Institute of Adult Continuing Education (England and Wales).

Its latest report, ‘No Limits:  From Getting By to Getting On’, takes head on the issue of low pay and lack of progression in the UK labour market.  It outlines clearly the mess we’re in – the 1 million more low paid workers in the UK than the OECD average; the productivity challenge which has been debated since at least the 1970s; and the shocking lack of social mobility which is entrenched within our social structures.

Surely it’s these big picture challenges which should be debated at May’s General Election – not the minutiae which fills our airwaves?

However, in the absence of such debate, I read NIACE’s proposals to fix these issues with interest.  The report tries to get on the table the issues that matter.  And what I found was indeed a brave attempt to come up with an answer to one of the trickiest economic and social conundrums of our time.

It would be easy to criticise. How can the construction of a new body, ‘the ‘National Advancement Service’, have any form of significant impact on such an entrenched and complicated set of issues?  However, at its heart is a simple idea –we provide people on low pay with a career coach and a personal career account; put simply – sound advice and access to a little cash.  That’s what many of us received through our parents and/or our schools/colleges earlier on in life, but many others lack either at the outset of their working lives or thereafter.

NIACE believe this will save money – £200 million per year across England by 2020; a figure which is very difficult to prove or disprove.  Therein perhaps lies the greatest barrier to the creation of such a scheme.  How do we get our politicians to invest at a time of austerity?  How do we get existing institutions to hand over already stretched budgets?

However, I do believe that there is a strong case for investment in decent careers advice at all stages of our working lives and that relatively small investments in skills development can transform lives.  I also believe that we’re not getting sufficient value out of the current skills system, that smaller employers are not sufficiently supported to invest in career pathways  and that many individuals, despite some of the political rhetoric, do have the appetite to increase earnings and reduce their reliance on benefits.

Now, I’m aware that there will be some who believe that ERSA members are part of the problem not the solution.  After all, a considerable number of ERSA members deliver the DWP back to work programmes, including the Work Programme.  Although now delivering well (indeed even the National Audit Office says it is delivering at least as well as predecessor programmes), there remains a perception that such programmes entrench people in low paid jobs.

Let us be clear: ‘into work’ services are helpful.  We know it is far easier to get a job once you are in a job – even if it’s relatively low skilled. But once you’re there, it can take a pretty radical shift to start thinking about taking control of a ‘career’. That’s where NIACE’s idea of trusted intermediaries could come in.  ERSA members know mentors/coaches work well in schools with kids at risk of becoming NEET. They also know they work well in relation to particularly disadvantaged jobseekers who access work for the first time but need help to stay there.  There is thus good reason to believe such coaches could well work for the larger number of individuals on low paid work.

Crucially, the creation of such a service must be in addition, rather than as a substitution, for tackling those big picture issues set out above.  We still need to fix careers advice in schools, to help young people transition into good jobs with career prospects at the outset and help employers to grow and provide decent job opportunities.  However, some decent careers advice and a little money could go a long way.  Let’s hope our politicians see that too.