Third Age Employment Network - Archived News August 2004

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Archived News August 2004

Week Starting 30th August

Link-Age – Joined Up Services For Older People

Perhaps just months before the next election, the Government is fulfilling one of its manifesto commitments from the last election to develop a so-called ‘Third Age Service’ for older people. Having spent time discussing, refining and piloting some of their ideas, they have decided to call it ‘Link-Age’ and focus it on the over 60s.

The vision behind Link-Age is that older people, or people seeking advice on behalf of an older person, will have easy access in their local area to information about the full range of services available – either through a single access point, or several access points which can offer advice across a range of issues.

The Government admits that the fully joined-up model is a longer term aspiration at the moment, but says that central and local government are already taking steps in that direction. They also stress that they are not talking about dismantling existing organisations and building a new bureaucracy to achieve this network of service. Instead they are focusing on building more effective strategic and operational partnerships between existing organisations.

These include such things as: setting up a Single Assessment process joining up social services with the NHS to deliver holistic health and social care assessments; setting up joint teams between the Pension Service and local authority staff which in a single visit can fill in all the forms with the older person so they can claim all the benefits and services they are entitled to.

The strategy also sees a bigger role for voluntary groups and not-for-profit organisations in running pilot schemes and taking claims for DWP benefits and verifying documents.

Fuller details are contained in ‘Link-Age : Developing networks of services for older people’ (available from www.dwp.gov.uk/publications/dwp/2004/linkage/index.asp ) .

The DWP, who are leading the initiative, say they would welcome written comments (by 26th November) and intend running a series of regional consultation forums over the autumn.

Court of Appeal Rules For DTI In Rutherford Case

The Department of Trade and Industry (DTI) has won the Court of Appeal hearing over the Rutherford case. For those unfamiliar with the case, the original ruling by an Employment Tribunal potentially extended employment rights on unfair dismissal and redundancy pay to employees working beyond state pension age.

The DTI challenged the Tribunal’s decision and won. Now the Court of Appeal has upheld the Employment Appeals Tribunal’s ruling that the upper qualifying age was lawful and that those working beyond pension age do not have the same employment rights as younger workers.

Now we will have to wait to see whether these rights will at last be extended to older workers in the age regulations.

See TAEN's press release on this subject here

Internet Recruitment Gaining In Popularity For Top Jobs

Nearly a quarter (23%) of firms are now using their corporate websites to recruit board directors. The figure has nearly doubled over the past year according to research from the Recruitment Confidence Index.

Emma Parry from Cranfield School of Management commented, “The current state of the labour market means it is increasingly difficult to attract suitable candidates, particularly at higher levels. Organisations are therefore spreading the recruitment net as wide as possible to find the best people.”

But its not just top jobs that are increasingly being filled via the internet. Over the past year the number of firms using their own websites to hire manual staff has trebled from 14% to 44% according to the RCI survey.

Unions To Demand Pension Compulsion

Trade Unions have decided that compulsion is the way to tackle the savings and pension crisis. So at this month’s TUC conference they will demand new laws requiring all employers to contribute 10% of employee’s salaries to staff pension funds. They will also call for a compulsory employee contribution of 5%, along with tax reforms to benefit lower-income pensioners.

The Government maintains it would prefer a voluntary approach but is waiting for Adair Turner and the new Pension Commission to report back next year.

Week Starting 23rd August

500 New Businesses Start Up Each Day

Some 236,000 new businesses started up in the UK in 2003 - equivalent to over 500 new businesses each day. About 70,000 were one-person bands, where an individual registered themselves as self-employed but the others were either partnerships or firms employing one or more people.

The figures are contained in a report just published by the DTI’s Small Business Service (SBS)in their Small and Medium Sized Enterprise (SME) Statistics for 2003. Here are some other statistics of interest :-

There are nearly 4 million business enterprises in the UK’s private sector.
Just under 3 million (71%) of them have no employees other than the ‘owner’.
99% of these enterprises were ‘small’ (i.e. employing 0 to 49 employees)
Only 26,000 were ‘medium-sized’ (50-249 employees)
Just 6,000 were ‘large’ (with 250 employees or more)
SME’s together accounted for more than half of the employment (58%) and turnover (52%) in the UK.
Small enterprises alone (0 to 49 employees) accounted for 46% of employment and 38% of turnover.

The SME sector is of particular interest to us because a higher percentage of people over 50 are self-employed and new businesses started by them are twice as likely to succeed.

50% Say They Would Work After Pension Age

Half the UK’s adult population say they would consider coming out of retirement to go back to work. Three quarters of them say they’d return to work to keep their minds active, nearly 6 out of 10 would do it for the money and 1 in 5 say it’s a way of escaping their spouse or family.

The survey which was conducted by Whitbread, found people in the West Midlands are the most keen to return to work – 60% say they’d like to do so, compared with just 1 in 4 in East Anglia.

See TAEN's press release on this subject here

Government To Announce Trade Union Academy

The Government is preparing to announce it will set up and partially fund a Trade Union Academy to train trade union representatives to university level. The aim is to improve their understanding of business and their ability to negotiate on behalf of their members.

TUC president Roger Lyons commented, “A university level academy for trade unions is a big challenge to the world of industrial relations. We will be more informed, more professional and more able to cope with the new pressures. I’m not certain if employers put up the kind of people who can handle that.”

Employees Losing Ill Health Protection In Pensions Switch

A new study by Mercer Consulting of 1800 UK occupational pension schemes has found that in the switch to money purchase pensions, many employees are losing the ill health protection they enjoyed under their old final salary schemes.

Mercer’s found that only 13% of money purchase schemes offered protection for employees retiring early because of ill health whereas it was a standard feature in most final salary schemes.

John Matthews from Mercer explains, “As companies have increasingly moved from final salary to defined contribution (money purchase) pension arrangements, members have become more financially vulnerable to the effects of ill health.

Companies with final salary schemes can dip into a large pool of money to pay pensions to members who retire early due to ill health. In defined contribution) schemes, each member has an individual pot of money which will rarely be sufficient to pay a decent early retirement pension.

Companies should either provide income protection for ill health or inform employees they do not have cover.”

Week Starting 16th August

Important Employment Law Changes Just Weeks Away.

New employment regulations* concerned with Employment Dispute Resolution come into effect on 1st October. They impact on both employers and employees.

Regardless of their size, all employers have to have in place minimum statutory procedures for dealing with dismissal, disciplinary action and grievances in the workplace. There is a legal requirement for them to inform their employees.

The Advisory,Conciliation and Arbitration Service (ACAS) will have a revised code of practice for employers, workers and their representatives and new ACAS fixed period conciliation regulations will come into force effecting the way and timetable for the handling of employment discrimination cases are handled.

Going by past experience a large percentage of employers will be unprepared for these important changes.

* The Employment Act 2002 (Dispute Resolution) Regulations come into force on 1 October 2004.

Changing Relative Importance of Business Sectors

For the first time business and financial services accounted for over 30% of total UK economic output in 2002. It was nearly double that of the manufacturing sector whose output dropped to 15.9% of the total, down by 2.5% compared with 2001.

Total output of the whole UK economy rose by 5% to £926 billion in 2002 according to the Office of National Statistics.

Grey Panther Prowling for Unemployed, Mature Yorkshiremen

A new European funded, ‘positive action’ programme (The Grey Panther Project) designed to improve the career prospects of unemployed men aged 45+, is about to get underway at the University of Leeds. The project is offering those entering the project: personal guidance, work placement, free tuition (subject to status) and individually tailored educational packages including Certificate of Higher Education or a degree.

To be eligible students must be male, aged 45+, unemployed for at least 6 months and normally resident in Yorkshire or Humberside.

The project is currently recruiting students for September 2004. Anyone interested should contact Jon Barber the project manager either by phone on 0113 343 6892 or e-mail him at j.m.barber@adm.leeds.ac.uk

Recruitment Confidence Wobbles Amongst SMEs

The latest CBI Quarterly SME Trends Survey reports that smaller manufacturers have seen the pace of recovery slow in the last 3 months and its having an impact on their recruitment intentions.

The CBI reckons the pause in growth could reflect the initial impact of higher UK interest rates but there has also been a moderation in demand in previously fast-growing overseas markets – in particular the US.

The number of people employed rose for the first time in six and a half years (since January 1998) but expectations for numbers employed in the next three months are level, indicating that jobs created will not be lost.

Week Starting 9th August

Employer Enthusiasm For Older Workers Increasing

Employers are becoming more enthusiastic about employing older workers according to a new survey from the UK’s largest employment law firm, Peninsula.

The survey of nearly 900 employers across business sectors was conducted last month (July) and found :-

81% would not ‘ideally’ look to employ just younger candidates.
76% would consider hiring someone close to retirement.
65% said age was an area of concern for their business.

Peninsula’s Managing Director, Peter Done said, “Employers are obviously choosing to utilise and develop their businesses with the assistance of experience and acquired knowledge from older employees.”

Even though these findings appear to be encouraging, its far too early to break out the bunting, pop the champagne corks and declare the battle against ageism over. The survey also found that just under half (47%) of the employers admitted to having rejected older candidates because of their age.

Stakeholder Pensions Still Ignored By Target Audience

Stakeholder pensions continue to be largely ignored by the very people they were designed for according to the Trades Union Congress (TUC).

They were launched 3 year ago to encourage low and average paid workers who had been left out of other pension schemes, to save for retirement. Any employer with more than 5 employees, who does not offer other forms of pension arrangements to staff is obliged to offer a stakeholder pension scheme. Thousands of schemes have been set up but the majority have no members, largely because the employers do not make any matching contributions.

The Government’s original target was to have 5 million people signed up in the first few years. However since to date only around 1.8 million stakeholder pensions have been sold, thousands to well off people taking advantage of their tax-efficiency and flexibility as a saving vehicle for their children and grandchildren.

According to the TUC, the typical employee with a stakeholder pension is only paying in £720 a year – which, converted into an annuity, would pay a meagre pension of £56 a year (or just over £1 a week) to a typical female worker. No sort of encouragement to save.

Pensioners Prop Up Employment Numbers

In what Jane Kennedy, the Minister for Work, describes as “a mixed picture” on employment, the only age group that is actually showing higher numbers of people in work over the past 3 months are those over state pension age. The numbers in work for all other age groups having fallen versus the quarter.

Those working beyond state pension age (SPA) has risen to over 1 million, up by 21,000 on the previous quarter. The numbers working in the 50-SPA age group fell by 18,000 and overall the numbers were down by 53,000. This means that 28.3 million people were in work, an employment rate of 74.6%.

Unemployment was up by 27,000 (to 1.44 million) but the Jobseeker claimant count was down by 13,700 (to 835,000) this month but is down by 102,000 since the same time last year. The claimant count is the lowest since April 1975.

Part of the explanation is that the figure for those of working age classified as ‘economically inactive’ has risen. Its up by 89,000 (to 7.85 million) over the previous quarter and is 120,000 higher than at the same period 2 years ago.

Jane Kennedy commenting on the overall figures said, “Despite a mixed picture this month, unemployment has fallen over the year to levels not seen since the mid 1970s and vacancies are high and rising……..Since 1997 the number of people in work is up by 1.9 million and all areas of the country have benefited……..Employment of people aged 50 and over has risen by over 1.3 million.”

Click here to read our Press Release.

Whopping Pension Black Hole In The Public Sector

A new report from actuarial consultants, Watson Wyatt, says the black hole in public sector pension schemes now stands at a whopping £580 billion – some 50% higher than the previous estimate. Unlike people in the private sector, public sector employees have not seen their final salary pension schemes closed to either new, or existing, employees. The threat to do so has prompted calls for, and actual, strike action by public sector trade unions.

The figures come just a week after several reports claiming the pension deficits amongst the UK’s FTSE 100 private companies are beginning to fall and may now stand somewhere between £30 and £60bn.

Public sector pension schemes tend to be financed by tax receipts rather than by contributions and investment returns. Stephen Yeo senior consultant at Watson Wyatt commented, “There is a divide opening up in our society between those who have pensions and those who do not.” The UK is unlikely to meet its public sector pension promises without raising taxes he said.

Week starting 2nd August

The Debate on ‘Full Employment’

The Government and some economists say that with 28.3 million people in paid work and an overall employment rate of nearly 75%, the UK is now close to full employment. We disagree.

There are nearly 8 million people of working age not in paid employment - including 2.5 million aged between 50 and state pension age. Various estimates suggest that at least 2 million of those not currently working who would like to.

Click here to read our published letter on this subject….

Skills Funding Consultation

At TAEN we believe that opportunity and access to learning and training are key to helping people make or cope with change throughout their lives. It is particularly important for those in mid or later working life who, for whatever reason, want or need to change direction. There are lots of issues around adult learning but one of the key ones is funding.

The Learning & Skills Council is currently conducting a consultation on the way skills training is funded. Titled ‘Investing in Skills : Taking Forward the Skills Strategy’ it covers fees, further education funding and learner support – in short, who pays for what.

It proposes some radical changes to the current arrangements and has very important implications for the future. To quote from Mark Haysom, the LSC’s Chief Executive …

“This consultation is a major step towards putting the Skills Strategy into practice. We are looking at how to bring about the changes needed to ensure that public investment is applied where it will secure the greatest benefits in our drive to raise the skills of the workforce; and, that employers and individuals contribute in line with the benefits they receive.
The changes proposed are potentially of great significance for those involved in post-16 education, for individual learners and employers. The consultation is intended to contribute directly to the “historic shift in expectations and practice about who pays for what” called for by Charles Clarke, Secretary of State for Education and Skills.
The proposals do not represent a reduction in the overall level of public funding for adult learning, but they do make clear our priorities. Our challenge is to re-focus public funds, particularly to help adults with low or no skills and/or qualifications. This will mean that better qualified people might need to invest a little more in their learning. We will also be looking to employers to invest in accredited, recognised training. Our aim is to achieve a better balance of public and private sector investment.”

Responses are due in by 8th October.

Visit www.lsc.gov.uk/National/Media/News/feesconsultation.htm to access the consultation documents.

New Act Underlines Carers’ Rights

At the end of last month the ‘Carers (Equal Opportunities) Act’ received royal assent. The Act will ensure carers are able to take up opportunities which those without caring responsibility take for granted. It builds on existing carers legislation and Government support for carers. It will :-

Ensure all carers know they are entitled to an assessment of their needs.
Place a duty on councils to consider a carer’s outside interests (work, study or leisure) when carrying out an assessment.
Promote better joint working between councils and the health service to ensure support for carers is delivered in a coherent manner.

According to Health Minister, Stephen Ladyman, “ We believe it will deliver real and concrete changes for carers by placing a duty on councils to inform carers of their existing rights and extend rights to consider the carer’s wish to combine normal everyday activities like work and hobbies with caring…..

“Carers are vital to our communities. They enable people to stay in their own homes and remain independent while enjoying a decent quality of life. But the key to enabling carers to undertake this role is support that ensures that they can also make choices as individuals allowing them to care full time, or combine normal everyday activities with caring.”

Its estimated around 3 million people aged 50+ are involved in unpaid caring for frail, sick or disabled adults.

UK Workers Underestimating Their Life Expectancy

It seems although most people are aware the UK’s population is ageing, they underestimate their own likely life expectancy and hence what they should be doing to save for an extended period of retirement.

According to a new research report the average UK worker underestimates his or her likely life expectancy by an average of 5.3 years.

The research found men aged between 25-34 who were surveyed underestimated their life spans by 5.1 years, while women in this age group thought they would live 6.5 years less than current actuarial calculations.

Women aged 55+ underestimated their likely life expectancy by 7 years, whilst men over this age were more accurate – only underestimating it by 2.2 years.

The research was conducted by the Society of Financial Advisers (SOFA), the Institute of Actuaries and the Continuing Mortality Investigation Bureau .

SOFA’s Bob Bullivant said,“ The miscalculation….is a disaster quietly bubbling under, but it is timed to explode in years to come as today’s work force realise it has collectively short-changed itself in making appropriate provision for a long retirement.”

Curiously enough he didn’t say anything about those whose attempts to save have been short-changed by misleading promises, deliberate mis-selling or the actions of others….

EC Taking Action on Discrimination Against Member States

The European Commission is taking legal action against six member states that have failed to fully transpose the EU anti-discrimination Directives. The Directives which prohibit discrimination on racial or ethnic origin, age, disability, religion and sexual orientation were due to be incorporated into national law last year.

The Commission is referring Austria, Belgium, Germany, Finland, Greece and Luxemburg to the European Court of Justice.

Mixed News on 'Interim Management' Market

There is mixed news for those already involved in, or contemplating entering, the Interim Management market contained in a new survey from Boyden Interim Management Recruitment. Just over half (51%) of the 600 Interim Managers surveyed said they had less work in 2003 than in 2002, although 48% said they had worked more.

Fees for nearly a third (31%) of the Interims were under £500 per day, whilst 42% charged between £500 and £750, with 10% managing to charge over £1000 a day. However, last year nearly half (48%) of Interims had seen their fees drop versus 2002.

The survey found that nearly 9 out of 10 (88%) of the Interims work in the private sector, with the largest sub-sector being accounting, banking and finance, closely followed by manufacturing. Only 1% worked in the charity or not-for-profit sector.

© TAEN 2006