Week Starting : 29th March

Kennedy Replaces Browne At DWP

Jane Kennedy has become Minister of State for Work at the Department of Work and Pensions. She fills the vacancy resulting from Des Browne’s departure to the Home Office, where he takes over as immigration minister from Beverly Hughes who resigned earlier this week.

Jane Kennedy’s responsibilities at the DWP will include: Labour Market Policy and the Economy; Welfare to Work; Jobcentre Plus; New Deals, as well as Health & Safety at Work.

She first became a Minister in 1999 within the Lord Chancellor’s Department and in 2001 took over as Minister of State in the Northern Ireland Office.

Nearly Half of Firms Extend Flexible Working

The latest IRS Employment Review survey suggests nearly half of firms have extended the right to ask for flexible working to all their employees, not just to parents with children under 6 years old.

While 45% of firms are offering flexible working to all their employees, 56% say they use the option ‘always or sometimes’ to attract staff – depending on the job.

Some 54% of firms say improved staff retention is one of the three main objectives for introducing flexible working, along with abiding by last year’s legislation and an improved employer brand.

Mark Crail of IRS Employment Review commented, “Many employers are now recognising that a policy which brings perceived benefits to one section of the workforce also risks alienating other employees.

The survey’s findings reinforce the view that flexible working can no longer be seen
simply as the ‘family friendly’ option.”

Part-time working was the most common form of flexibility being offered, followed by flexible starting or finishing times and temporary reduction of working hours.

Just under three quarters (72%) of the firms surveyed expect a greater take-up of flexible working over the next 3 years. Nearly four out of five (77%) want an extension to the legislation so that the right to request a change in working arrangements is not restricted to parents or carers alone.

New Deal 50+ : No News Is Good News?

A year has gone by since the Department of Work & Pensions (DWP) published any new data on the New Deal 50 Plus welfare-to-work programme. Up till April 2003 nearly 100,000 unemployed people over 50, who had volunteered to participate, had been helped into work by the programme. Some 12% of these had chosen to become self-employed but nevertheless still qualified for an Employment Credit of £60 a week for a year - along with anyone else on the scheme - whose job was paying less than £15,000.

Evaluations of New Deal 50+ showed that a very high percentage (circa 80%) of those helped by the programme remained in work even after their Employment Credit finished at the end of 12 months. Indeed in this ‘sustainability’ aspect it was one of the most successful of any of the New Deal schemes.

Information on job starts and take up of the Training Grant – another of the scheme’s components – was published regularly.

Then last April the Employment Credit was changed to a Working Tax Credit, the value of which was based on household income – not just on the salary the job taken paid. TAEN, and other organisations, warned this was a retrograde step and would adversely impact the success of the programme. Were we right ? It seems so, but as no statistics have been published since the change, no one – except the DWP/Jobcentre Plus - knows for sure and by how much the numbers of unemployed 50+ year olds being helped into work by ND50+ has fallen away.

The chances are that in this instance, no news is not good news…..

Over 50s Earn Less

The myth about older workers being more expensive to employ has been challenged by a survey from Paymaster.com. It shows that in a large number of sectors, employees aged 50+ are earning less ‘on average’ than their younger colleagues.

For instance the average HR professional aged 41-50 earns £33,025 compared with £28,161for those aged50+. In the Accountancy, Banking and the Internet sectors the difference is even more extreme.

In Accountancy the average 41-50 year old is earning £34,310 compared with £24,446 for their colleagues aged 50+. In Banking the average 41-50 year old is earning £35,089 versus £26,411 for their colleagues aged 50+ and in the Internet sector whilst the average 41-50 year old is earning £38,725, this drops to £27,068 for the average over 50 year old.

Experts believe these figures reflect employers’ concerns about recruiting and retaining younger workers and that they are prepared to give them higher salary increases and pay them inflated bonuses.

The survey found only 3 professions (Education, Broadcasting and Transport) where older staff were on average paid more for their knowledge and experience.

The existence of the pay differential was also supported by the latest set of Older Worker Statistics from the Department of Work & Pensions showing that the average gross hourly wage for workers aged between 50 and state pension age across the UK economy was £10.69 versus £10.90 for those aged 25-49.

Workplace Discrimination Falling in West London

A survey commissioned by London West Learning & Skills Council from Wise Owls found that nearly 60% of local people in West London felt they had suffered no discrimination at all when looking for work or training.

The report found that within the West London area – which covers the boroughs of Brent, Ealing, Hammersmith & Fulham, Harrow, Hillingdon and Hounslow, - ethnic background was becoming less of a barrier to employment or training. There were comparatively low levels of discrimination against women and measures taken to reduce discrimination against 19-24 year olds had proved successful. There was evidence that ‘ageism’ was less of a difficulty for the over 50s although the problem persisted and needs to be addressed.

The researchers found the greatest problems in terms of workplace discrimination were those impacting disabled people (38% of whom felt they had been discriminated against when applying for a job), asylum seekers and refugees.

Peter Pledger, Executive Director of London West LSC, commented on the report,
“While it is worrying to see that particular groups of people feel they are being discriminated against in the workplace, it is encouraging to note that in many traditional areas of employment discrimination is reducing significantly…We are also encouraged by the desire expressed by both employers and individuals for more information and promotion of the benefits of employing a diverse workforce. These findings will help us in targeting resources into training, skills development and employer support”

Week Starting : 22nd March

‘Liquid Lives’: The Solution To Pensions Crisis

There are two approaches to tackling the pensions crisis. The first is to force people to work longer and raise retirement ages, the alternative is to ‘reshape’ retirement by encouraging the concept of ‘liquid lives’. These are the conclusions from ‘The Opportunity of a Lifetime – Reshaping Retirement’ from the Tomorrow Project which has just been published by the Chartered Institute of Personnel and Development (CIPD).

The report says the first option will be resented by people and do nothing to change views of retirement. The second ‘liquid lives’ approach is one in which:-

People will mix and match work, extended leisure and learning throughout their lives and retirement is no longer seen as a distinct phase. As people continue to work part-time after the traditional retirement age, the rest of the population will begin to look on older people in a new and more positive light.

Traditional approaches to career development change. Rather than being stuck in an unfulfilling career by fear of impending retirement, people feel able to change career in their 50s and beyond.

The need to adapt working patterns to become more flexible for older people has a positive knock-on effect for the terms and conditions of younger workers.

The increased supply of older, more experienced workers helps to address skill shortages, benefiting the national (and local) economy.

The report sets out the steps required to achieve reshaped retirement. These include new patterns of work enabling skills shortages to be met by older workers on reduced hours; radical reform to the state pension, increasing its value and paying it from the central age of 70- although it could be taken earlier or deferred till later; and a radical new approach to savings – taking a whole life approach and matched government funding - to create a single vehicle to fund the purchase of 3 individual assets – learning, housing and retirement income – for people.

Employers Pension Schemes – Alive If Not Healthy

The Department of Work & Pensions (DWP) has just published the findings of its latest Employers Pension Provision Survey conducted in Spring 2003. It shows a substantial increase in the number of employers offering their employees access to pension schemes over the previous 3 years.

The figures have been driven up by the inclusion of access to Stakeholders Pensions since 2001 and the fact that 64% of employees worked in organisations which provided this access. However only 17% of those organisations provided any contribution to their employees’ Stakeholder Pension schemes

The survey was conducted with 2000 private sector employers and found that overall 52% of them provided some type of pension or access to a pension and 92% of employees worked in organisations with some form of pension provision.

Some of its other key findings:-

• 7% of employers offered access to occupational pensions, 35% provided access to Stakeholder Pensions, 12% offered Group Personal Pensions (GPPs) and 15% contributed to employees personal pension schemes other than stakeholders and GPPs. Nearly a quarter offered more than one type of pension arrangement to some of their employees.
• 56% of occupational schemes were open, 33% were closed and 11% were frozen.
• Active membership of open salary-related schemes in larger organisations (those employing over 20 employees) declined from 24% of the workforce in 2000 to 16% in 2003.
• Employers contributions to money purchase (Direct Contribution) schemes averaged 5% compared to 8% for final salary schemes still open and 13% for those which had been closed.

Nearly 50% of Over 50s Jobseekers Want To Work On Past Pension Age

A new survey from Age Concern/Reed Recruitment says that 50% of jobseekers over 50 want to work on past state pension age (SPA) - yet 80% have already experienced ageist rejection by employers.

The survey of over 3300 jobseekers aged 50+ found that whilst 10% want to retire before they reach 60 and a third want to retire between 60 and 65, 25% don’t want to leave work till they are between 65-70 and a further 23% want to go on working past SPA for as long as possible - until they are forced to stop.

However 4 out of 5 people surveyed feel their job applications have been rejected solely because of their age, and nearly half say employer perceptions are a major barrier. One in three also believe ageism begins to prejudice work opportunities below the age of 45.

Somewhat surprisingly over 75% of these jobseekers want to work full-time or as much as possible - with only 5% wanting the option of part-time employment in some form. This certainly challenges the view that older workers are looking for more flexible working arrangements.

James Reed of Reed Consulting commented on the survey, “Older people are much keener to work on beyond retirement age than in the past. What’s more nine out of ten are committed to further training to ensure their skills meet employers’ needs.

The major barrier to fully using these skills appears to be out-moded perceptions of what older workers can contribute. Yet employers simply cannot afford to maintain such perceptions into the future, as skills shortages accelerate and demographic shifts drastically cut down the number of younger workers available.”

Government Refuses To Lift Age Cap on Student Loans

Last week the Government said it has no intention of lifting the upper age limit of 54 on student loans (click to read previous item). Responding to a question from the Lib Dem MP for Romsey (Sandra Gidley) the Minister for Lifelong Learning and Further Education (Alan Johnson) said,

“We support the (EU) article 13 changes in respect of age discrimination, but we believe the decision not to give loans to students aged 55 and over was objectively justified. Indeed, a recent request for judicial review was turned down at the appeal court stage, because the court agreed with us that insisting students aged 55 and over be unable to access loans constitutes a sensible and proper use of taxpayer’s money, given that we wipe out any debt at the age of 65. I should add that under previous Governments the age limit was 50, so we have increased it.

We are committed to making it easier for mature students to get to university, but we do not believe we need to go further in respect of loans to do so.”

Ask For Flexibility And Kiss Career Goodbye

I.T. employees seeking a better work/life balance fear that asking to work flexibly will
mean the kiss of death for their careers.

93% of women and 81% of men surveyed in a DTI/Women in IT Forum survey want greater flexibility because they feel they are missing out on their childrens’ development, but three quarters of those surveyed think if they do gain flexibility it will spell the end of their careers because key roles and projects are only given to full-time employees

Week starting 15th March

Civil Service Job Losses – The Sting In The Budget’s Tail

In an otherwise ‘steady as you go’ budget which saw the Government confirming its commitment to increased spending on public services, the announcement of nearly 44,000 job losses in the Civil Service was one of its few surprise announcements.

The DWP will bear the majority of the losses with 30,000 jobs going, next comes 10500 jobs going from merging the Inland Revenue and Customs and Excise, the Department of Health will lose 1800 jobs and the Department for Education & Skills will shed 1400 employees. The reductions will take place over the next 4 years.

Civil Service trade unions had not been consulted prior to the announcement and have demanded urgent talks with Ministers. With public sector jobs set to continue to rise over the next few years its unclear how many of these losses will be actual
current positions.

The Chancellor also announced that 20,000 civil service jobs will be moved out of London to the regions.

TAEN Budget Overview Here is a summary of Budget items relevant to the age and employment agenda. Several items had already been announced in the Pre-Budget Report or in various policy announcements over the past 3 or 4 months (e.g. New National Framework for IAG, the Pensions Bill). Workforce Learning, Development & Skills The extension of the Employer Training Pilots to cover a further 6 new areas from September 2004 (bringing the total to 18 areas and covering a third of the country). The new locations will be the North East, Lancashire, the Black Country, West Yorkshire, Cambridgeshire, Devon and Cornwall. Important because of the wide age range of participating employees. The launch of a New Deal for Skills programme to help ensure ‘each individual is helped to develop the skills he or she needs to be employable and each employer – whether private, public or voluntary sector – can develop the skilled workforce needed for success in his or her business’. It will build on the New Deal for work and policies in place or planned under the Skills Strategy e.g. free training in basic literacy, numeracy and ICT skills; free training to a first full NVQ level 2 etc, improved adult IAG services. There will be a local skills advice point (Jobcentre Plus offices) through which employed or unemployed individuals with low skills can get free access to high-quality advice and training. Jobcentre Plus will work with Information, Advice & Guidance Partnerships (IAGPs) to ensure that skills counselling is available in Jobcentres. Skills counsellors will be located in and integrated with the work of JC+ offices, as well as linking closely to local colleges and training providers. This builds on the important report in February, Welfare to Workforce Development, by the National Employment Panel on bringing the learning and work programmes and targets closer – more detail to follow in TAEN Spring Newsletter. To go alongside the New Deal for Skills, DfES will look into the development of a new skills passport. This will allow learners to compile records of training and skills gained, structured according to employers’ needs for skills and accumulating over time to secure recognition through qualifications. Business Links The delivery of local Business Link services will be devolved from the DTI to the Regional Development Agencies from April 2005. This is a significant change in structure. Jobseekers From April an increase in the minimum number of steps that JSA claimants are required to take to search for jobs and an increase in the number of interventions in the first 6 months. From April the introduction of specialist advisers in Jobcentre Plus districts with high ethnic minority populations and a new policy fund of £8 million over 2 years to help JC+ managers provide local innovative solutions to helping people from ethnic minorities back into work. Confirming the four additional Pathways to Work pilots in East Lancashire; Essex; Gateshead and South Tyneside; and Somerset for helping those going onto Incapacity Benefit get back into work. A new high profile national guidance campaign to raise employers awareness of, and ability to adopt flexible employment and retirement opportunities in order to increase the recruitment, training and retention of older workers. (No details available yet). However, the ability to draw a pension and a salary from the same employer at the same time is delayed till April 2006 when a simplification to the tax regimes applying to occupational pensions will be introduced. A commitment to examine the range and availability of provision and support needs of both unemployed and economically inactive people, integrating services within the New Deal to ensure that the full range of effective support is in place. This presages more general reform of the New Deals. An extension of the 63 Action Teams for Jobs which focus on the long-term unemployed and inactive in 63 disadvantaged areas of the UK to 2006. Productivity The Budget briefing papers refer to another report published today “Devolving decision-making:2 – Meeting the regional economic challenge, increasing regional and local flexibility” which is likely to be of interest.

Union Claims 3 Tier Minimum Wage Is Ageist

The Low Pay Commission has recommended the introduction of a national minimum wage for 16 and 17 year olds of £3 an hour. It has also confirmed its recommendation for rises in the minimum wage for adults from £4.50 to £4.85 an hour and for 18-21 year olds from £3.80 to £4.10 an hour from this October.

However, the UK’s largest trade union – the GMB – thinks the 3 tier system is too complicated and ageist because it discriminates against workers aged under 21. It says employers will be confused and fears there will be problems with enforcement.

The union’s general secretary commented “The GMB believes that employers should pay the rate for the job and not the age of the worker. Creating three tiers based purely on age legitimises age discrimination by allowing companies to pay employees that do the same job different wages, based purely on age.”

Landmark Court of Appeal Ruling on Temps

The Court of Appeal has overturned an Employment Tribunal Appeal ruling that a long-term temporary worker claiming unfair dismissal had been employed by the recruitment agency he was signed up with. The Court ruled that he was actually employed by the organisation he went to work for – Wandsworth Council not his agency - Brook Street Bureau.

Lawyers are warning the ruling could have huge implications for employers because it fundamentally changes the employment triangle between temps, employers and agencies and entitles temporary workers to employment rights after just one year’s service.

Week Starting 8th March

Move To Lift Age Limit On Student Loans

The Liberal Democrats have proposed an amendment to the Higher Education Bill which would lift the age limit on student loans. Under the current system students aged 55 or over are not eligible.

Commenting on their amendment Phil Willis (Liberal Democrat Education Spokesperson) said, “The current upper age limit on student loans is one of the most blatant pieces of age discrimination in any area of public policy.

Most learners aged over 50 completed their initial education at a time when fewer than 15% of 18-30 year olds went on to higher education. They will have paid income tax for more than 30 years. To exclude them from being able to access state support to learn later in life is simply unjust.”

Two New Proposals On State Pensions

The Pensions Policy Institute (PPI) and the Adam Smith Institute have chosen the same day to publish new proposals regarding state pensions and state pension age. Both organisations hope their proposals will inform the current debate and lead to consensus but unsurprisingly they’ve come up with different ideas. However, both call for a radical simplification of the current state pension system and propose increasing state pension age.

The PPI joins the growing band of voices calling for a ‘Citizen’s Pension’ based on residency rather than on national insurance contributions. It says that this approach is both ‘practically and economically feasible’ for the UK.

One of the main attractions of the Citizen’s Pension approach is that it would ‘provide a swift, simple and sustainable remedy for the problems with our state pension system.’ according to the PPI. It would overcome the pension penalty suffered by so many women – and particularly older women - caused by their fractured, or non-existent, work record. There would also be no take-up issues as there are with means-tested benefits. Citing the example of New Zealand, which has had a Citizens Pension for a long time, only around 5% of senior citizens live in poverty compared to 20% who do in the UK.

The key features of New Zealand’s Citizen’s Pension are :-

• One flat benefit, set at or above the means-testing level.
• Indexed to national average earnings.
• Paid to every eligible individual over 65, single or married.
• Eligibility is set by how long the individual has been resident.

According to Alison O’Connell, Director of the PPI, “A Citizen’s Pension is simple to understand and makes clear what can be expected from the state in retirement. There are no disincentives to save…It would remove the risk of being under-pensioned. This is a real problem for many people, typically women, who will not follow the work pattern required to get the full state pension under the current system.”

“It would be simple and cheap to run. It could be introduced overnight and then sustained well into the future. “

The PPI calculates that a Citizen’s Pension set at Guarantee Credit level (the old Minimum Income Guarantee level - set to rise to £105 per week from April) can be afforded immediately within the current government spending on pensions. It would ensure pensioners are guaranteed a minimum level of income without the need for extensive means-testing.

The report from the free-market Adam Smith Institute has been written by Alan Pickering, who last year published a Government commissioned report on the future of pensions. This new document titled ‘How Can The Government Get Us Saving Again’ looks at the roles the state, employers, providers, individuals, regulators and incentives should play in future pension provision. It contains several key proposals :-

• A dramatic increase in the state pension to around £200 a week, partially achieved by merging the basic pension and the state second pension by 2008. State pension age raised to at least 68 by 2025, by which stage
  the universal state pension should be worth around 40% of average
  earnings.
• Incentives on employers to re-train older workers rather than ‘throwing them on the scrap heap’ and incentives for employers to set up and support private pension plans they believe are right for their staff.
• An end to government micro-management of the pensions regime, with simpler tax rules, an industry-led compensation scheme, lighter regulation, and equal encouragement of different savings methods.

The report regards the role of employers as ‘pivotal’ in getting the nation saving again. “No longer can we afford to pension-off workers in their prime,” says Pickering. “Encouraging retraining and allowing older people to remain economically active will jot only benefit them, but will make it easier to plug the savings retirement gap…..Every adult, irrespective of age, should have access to suitable employment and training opportunities”

“Employers should be also encouraged (not compelled) to contribute to staff pension funds and to promote greater financial literacy among their workers.”

Union Membership Rises

The number of UK employees who are union members rose to 7.42 million in the year to autumn 2003. This is the first rise since the ONS first compiled records in 1995 and means just under 30% (29.1%) of both men and women employees are union members.

Historically union membership has been higher amongst male than female workers. However, whilst unions are attracting more female members, few women are making it to top positions within them. The Equal Opportunities Commission recently reported that less than 1 in 5 (18%) of trade union general secretaries are women and called on unions to make more progress on this issue.

DWP Allowing Staff To Work On After 65

The Department of Work & Pensions (DWP) has become one of the first Government departments to allow staff who want to, to go on working after 65. They are offering a short-term extension of existing contracts beyond 65 to staff (excluding Senior Civil Servants) who want to stay on.
Senior Civil Servants are still forced to retire at 60 unless it is considered to be in the ‘public interest’ for them to continue working – whatever that means.

The DWP has said it will review its position on retirement ages in the light of development of the Government’s forthcoming age legislation.

Week Starting 1st March

EC Slams Restructuring Early Retirements

According to a new policy document just published by the European Commission ‘the practice of using early retirement to restructure businesses must come to an end…..Early retirement schemes are a short-term answer to economic downturn and corporate restructuring. They entail a permanent loss of human capital and growth potential, as withdrawal is difficult to reverse when economic conditions improve.’

Increased participation of older workers is important if the EU is to create the estimated 15 million jobs needed to fulfil the target agreed by member states of an overall 70% employment rate by 2010.

The document goes on to say….’There is no evidence to suggest that older workers cannot make a full contribution to employment growth in expanding sectors – in fact, employment growth for older workers superseded that for prime age workers in most service sectors between 1998 and 2002.’

Commenting, the acting Commissioner for Employment and Social Affairs, Margot Wallstrom, said “Europe’s older workers have much to offer, and we need to ensure that they are given the maximum support to remain in the labour market.”

The UK has already achieved the EU’s employment rate target for 55-64 year olds
but as we know there are still well over a million older workers – let alone people over state pension age - who would like to do some form of paid work.

12,000 Manufacturing Jobs Lost So Far This Year.

Manufacturers’ business confidence and order books may be growing but the loss of jobs goes on in the sector. Since the start of the year over 12,000 jobs have been lost. The hardest hit region has been the East of England where job losses totalling nearly 2000 have been announced by 16 companies.

The general secretary of the GMB union said, “UK manufacturing is in crisis as the outsourcing phenomenon continues to drain jobs and livelihoods from our heartlands. We have the skills, capacity and experience here to keep these jobs. All we need is the determination from chief executives and the Government to ensure that our manufacturing sector can thrive.”

70% of Employers Offering Some Flexibility

A new poll reveals that nearly 7 out of 10 employers (69.5%) are allowing employees with young children to adopt flexible working patterns, helping them balance work and home life. However, it also found that quarter of the people surveyed thought part-time workers are less committed to their work.

The poll was conducted by ICM on behalf of the Public and Commercial Services Union (PCS) and comes nearly a year after parents with young or disabled children were given the right to request their employers for flexible working arrangements. Many commentators – including TAEN – have been pressing for this right to be extended to all adults. We believe that many older workers and jobseekers would welcome the opportunity to work part-time or in other more flexible ways.

However, the PCS have uncovered some uncomfortable data relating to part-time workers in the civil service where the numbers working part-time have doubled over the past 10 years. It highlights that part-time civil servants lose out in pay, progression and appraisals - 65% of them are in the lowest grades and earn on average £3,000 less per annum pro rata than their full time colleagues.

Free IT Training Pilot Scheme

Employers in the South of England can benefit from a new training scheme being funded by the Learning and Skills Council. Their employees can receive up to £700 worth of free IT training.

The scheme precedes the introduction of the new ITQ (Information Technology Qualification) which is expected to replace the current IT NVQ.

The pilot scheme is being supported by the Internet Exchange, the British Computer Society and e-skills UK. Areas in the trial are: London, Devon, Cornwall, Hampshire, the IoW, Surrey, Kent and Medway.The scheme should be rolled out nationally from September.

9 Million CVs Registered with Top UK Internet Job Sites

Whilst some employers may have backed away from advertising their vacancies online (click here to read previous news item), job seekers are still flocking to the web.
A new report on the UK online recruitment industry reveals that the top 100 UK online job sites had more than 9 million CVs registered with them at the end of last year.

The report shows that the online recruitment market is consolidating with larger sites getting bigger and smaller sites falling away. It is also predicting that the percentage of jobs filled via online advertising will rise from just over a third to a half by the end of 2004.