Third Age Employment Network - Archived News October 2005

Week Starting 31st October

Hutton Promoted To Replace Blunkett At DWP

Following David Blunkett’s sudden departure this week, John Hutton has been promoted to take over as Secretary of State at the Department for Work & Pensions. He takes on the job which many commentators now view as a ‘poison chalice’ and in doing so becomes the fifth person to hold the office in the past four years.

The reform of pensions, welfare-to-work and the Child Support Agency, the reorganisation and increased outsourcing of Jobcentre Plus services and the delivery of the DWP’s share of the Gershon cuts in spending are just some of the legacy items which Hutton inherits. All are urgent and challenging to say the least. And just to make things more difficult, he’ll have both the Prime Minister and Gordon Brown breathing down his neck to deliver.

The job was allegedly offered to Hilary Benn first, who decided discretion was the better part of valour and turned it down.

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Women’s Pay & Pensions Disdavantage

Two items from opposite ends of the spectrum which highlight the pay and pensions disadvantage which women suffer from :-

Although the number of females reaching director level in organisations is increasing, their earnings are still lagging significantly behind that of their male colleagues. Whilst the average gender pay gap is around 18%, female bosses it seems earn on average 25% less.

Findings from the Institute of Directors and Croner Reward Survey show that across companies of all sizes, female directors now earn an average £55,000 per annum, versus male directors’ average basic pay of £72.100.

The largest pay gap still occurs in the financial services sector where women bosses earn on average 35% less than their male counterparts. The public sector on the other hand has the highest proportion of female directors (21%) and has the smallest gender pay gap (7%). Proof, if it were needed, that the duty on the public sector to promote gender equality is working. But don’t expect to see the Government extending a similar duty to the private sector anytime soon.

When it comes to pensions, the DWP estimates 2 million women are not building up any entitlement to the basic state pension and as a result will have to claim the pensions credit - a means tested benefit.

At the moment, only 30% of women reach state pension age with entitlement to a full basic state pension compared to more than 80% of men according to Stephen Timms , the Pensions minister. He readily admits the present system is unfair to women.

In addition fewer women of working age are contributing to a private pension; 38% versus 46% of men.

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Train To Gain

The National Employer Training Programme due to be rolled out nationally next August is to be given the national branding of ‘Train to Gain’. Based on the 18 pilot Employer Training Pilots which have been running around the country, Train to Gain will be the vehicle for potentially delivering a first NVQ level 2* qualification to any adult employee who doesn’t currently have one.

But many questions remain to be answered, including :-

Will employers be able to claim wage compensation for releasing their employees to attend training ? If so, will such a scheme be available throughout the country or only in specific areas ?

How will this new ‘adult entitlement’ be marketed and made available to those who are unemployed or economically inactive ?.

And in those areas where training up to a first level 3** is to be available, will the upper age limit of 30 for those participating be lifted ?

*Equivalent to 5 GCSEs A-C grade or 5 ‘O’ levels ; ** Equivalent to ‘A’ level

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LSC Restructuring – More Details

Following last month’s announcement that the Learning and Skills Council is to shed 1300 jobs, more details are emerging about the restructuring.

At present there is a national office in Coventry and 47 separate local Learning & Skills Councils (LLSCs) around England. There is one LLSC per English county – except in London where there are 5 LLSCs covering the capital.

Over the past 18 months there has been a move towards a regional structure mirroring the 9 English regions. The regional impetus and staffing at the regional centres will be increased, whilst 646 jobs will be cut at Coventry .

Some have seen this as a precursor to having the LLSCs themselves coming under the authority of the Regional Development Agencies (as has already happened with the Business Link organisation) but that’s not happening - yet at least. The LSC’s nine regional centres are to work alongside, not reporting to, the RDAs.

Other changes will see 148 Partnership Teams created which will aim to build partnerships with colleges, schools, training providers, local authorities and local MPs.

In addition 35 economic development teams will be deployed across England who will have a specific regeneration remit and will operate separately from the rest of the organisation. They will be working with employers and other bodies to improve the quality and quantity of jobs in their areas.

According to some reports all 4,700 staff employed at Coventry and at the 47 LLSCs will have to reapply for their jobs.

Meanwhile, Ken Livingstone, the Mayor of London, has made clear his ambition to have the 5 LLSCs in London come under his authority.

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Week Starting 24th October

Women Make-Up Two Thirds Of Public Sector

Public sector workers are more likely to be women and to work part-time than employees in the private sector. Nearly two thirds (65%) of public sector workers are women, compared with 41% in the private sector and around 30% of public sector workers work part-time, compared with 24% in the private sector.

The newly released ‘Public Sector Employment Trends’ report from the Office of National Statistics provides a wealth of interesting information. Including :-

The public sector currently accounts for 20.4% of total UK employment. Across the 4 nations, 23% of the workforce in N.Ireland, 24% in Scotland, 23% in Wales and 20% in England, worked in the public sector
The public sector workforce is older. In 2004 nearly three quarters (72%) were aged 35 and over compared with 62% of private sector workers.
Public sector workers are more likely to stay longer with their employers. In 2004, 57% of public sector workers had been with their current employer for 5 years or more, compared with 45% of private sector workers.
In 2004 the proportion of non-white workers was 7% in both the public and private sectors. Around 13% of both public and private sector workers were long term disabled.

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Age Discrimination : Alive & Well in A Workplace Near You

Close to a quarter (22%) of managers and personnel professionals admit to having discriminated against jobseekers on account of their age. This is just one of the findings of a survey conducted with nearly 2700 managers/personnel officers by the CIPD* and CMI** over the past couple of months.

The finding does beg the question of how many may have done so but weren’t prepared to admit it. Because some 59% of those surveyed say they themselves have suffered from age discrimination. Almost half (48%) said they had encountered it at job application stage, while 39% believe their chances of promotion have been hindered by it.

And when it comes to promotion, nearly two thirds (63%) of the respondents believed that workers between the ages of 30-39 had the best promotion prospects, while only 2% thought that those aged 50 or above did.

The ‘Tackling age discrimination at work: creating a new age for all’ report covers a number of work and retirement related topics.

Other findings include :-

Women employees were judged as ‘older’ at a younger age than men (55 Vs 57).
The majority of respondents expected to retire by the age of 65, despite believing that the age of retirement for the average employee in 10 years time would be 66 or older.
Nearly 30% of the organisations represented, no longer have a mandatory retirement age.
Over two thirds of respondents (68%) said they anticipate working part-time towards the end of their working lives and a quarter claimed that the ability to work reduced hours would be a key factor influencing retirement. But only a third of organisations currently offer part-time working to older employees.
Nearly 80% of respondents agreed that career advice and training will be critical in retaining older workers but only a quarter of their organisations do currently offer career advice to older workers.

Petra Cook, Head of Public Affairs at the Chartered Management Institute commented, “Looking at the changing demographics, approximately 80% of the workforce for 2020 is already in employment. As such, organisations will need to focus on upskilling and reskilling their current workforce. This is reflected by the finding that the need to retain skills is the key driver of retirement policy.

It also means that individuals must now plan their careers in a new light. The days of a single, linear career are over and employees must take some responsibility for creating new opportunities and challenges in their later working lives.But, in order for this to happen, organisations will have to adapt to ensure that older workers are treated as an asset and offered flexibility.”

* Chartered Institute of Personnel and Development ** Chartered Management Institute

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Occupational Health Rising Up The Public Policy Agenda

Employers are being encouraged to play a bigger role in improving the health and wellbeing of their employees. Despite some 40 million working days being lost each year due to occupational ill health and injury, just 15% of organisations currently provide good occupational health services to staff according to the Health and Safety Executive.

So, last week the ‘Health, Work and Wellbeing – Caring for our future’ strategy was launched by the Government. It not only means the Department of Health, Department for Work & Pensions and the Health and Safety Executive will join forces to help improve the health and well-being of people of working age, the strategy also places responsibility with employers, healthcare professionals and individuals.

However, the Government has ruled out introducing financial incentives, such as tax breaks, for companies to introduce health schemes for staff, saying there is ample evidence to prove that it was the right thing for organisations to do.

As if to underline the point, a new study on workplace wellbeing programmes claims that they can generate a return on investment of close to 400% for employers. The report also suggests that unhealthy staff are 18% less productive than their healthy counterparts.

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Obesity Hampers Employment Opportunities

People who are excessively overweight are losing out in the employment stakes.
A survey conducted amongst 2000 HR Professionals by Personnel Today magazine, found obese people are discriminated against when applying for jobs, are passed over for promotion and are more likely to be made redundant – simply on the basis of their weight.

Over 9 out of 10 of the HR Professionals surveyed said they would choose a ‘normal weight’ job seeker over an obese applicant with the same experience and qualifications.

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Week Starting 17th October

Link Found Between Working Longer & Living Longer

According to new research reported by the British Medical Journal, those who work longer are likely to live longer. Despite a widespread perception that early retirement is associated with longer life expectancy, the opposite was actually found to be true.

The study of 3,500 employees working in the petrochemical industry in Texas tracked three groups. those who had retired at 55, 60 and 65 for up to 26 years after their retirement.

The researchers found that the number of deaths for employees who retired at 55 were nearly twice as high in the first 10 years after retirement compared with those who worked on to 60 or 65.

What’s more, longer life expectancy improved with increasing age at retirement for people from both high and low socio-economic groups.

Click here to read TAEN’s press release…

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Population Projections Revised – Again

Was it Mark Twain who famously said there were two certainties in life – death and taxes. Maybe he should have added a third – that forecasts are invariably wrong. The further away the events in question, the greater the margin for error.

So new population projections released this week by GAD (the Government Actuary’s Department), now reveal it expects the UK population to be 1.3 million (some 2%) higher in 2031, at 67 million, than it was previously predicting. Also that whilst its previous projections forecast the population as peaking in 2050 and then gradually starting to decline, it now forecasts the population will continue rising until 2074.

GAD says the revised projections are primarily due to higher migration and higher long-term life expectancy assumptions.

The projections still predict that the working age population will become much older.
In 2004 there were 2.1 million (12%) more working age adults aged under 40 than over it. By 2010 it will have dropped to just 1 million (5%) more and by 2020 there will be nearly 1 million fewer people aged under 40 than over it.

The number of people of state pensionable age* was 11.1 million in 2004. This is projected to rise to 12.2 million by 2010. The number is then expected to rise to 15.3 million by 2031 and to 17.5 million by 2050.

By 2007 the population of state pensionable age* is projected to exceed the number of children under 16 for the first time. By 2031 there are expected to be 4 million more people over stae pensionable age than under 16.

Finally, the dependency ratio – the number of people of working age to the number over pensionable age – which is causing such concern to policy makers and pensions experts, is expected to fall from 3.33 in 2004 to 2.4 in 2040.

A new set of projections are due to be published in 2007, by which time some of the working assumptions GAD use may have changed substantially. For instance, the definition of both ‘working age’ and ‘state pensionable age’.

* 65 for men, 60 for women. Between 2010 and 2020 the state pension age for women will also gradually rise to 65.

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Public Sector Pension Age Climb-down

The Government has averted possible strike action by public sector trade unions by agreeing to maintain the present pension age of 60 for nearly 3 million existing employees covered by pension schemes in the health, education and civil service.

The original plan announced by Ministers had been to raise the age at which public sector employees qualify for a full pension to 65 by 2013. Their trade unions threatened widespread strike action and in the run-up to last May’s General Election, the Government backed-off and said it would enter into negotiations with the unions on their plans.

But under the agreement reached this week, any employee joining before June 2006 will still be potentially able to qualify for a full, final salary pension at the age of 60. After next June however, all new entrants will have to work to 65 to qualify, although they will be able to retire earlier with a reduced pension.

Last weekend, Alan Johnson, Secretary of State at the DTI, was telling journalists that the case for a rise in public sector retirement age was ‘irrefutable’. He said, “For us to say to the private sector you have to work longer and save more money, and to the public sector you stick with your retirement age is impossible.”

Which explains the howls of protest from employers’ organisations and much of the press which greeted announcement of the compromise. The CBI said they were livid and that it was a disgrace. They accused the Government of giving in to trade union pressure at the first sign of trouble.

The Director General of the British Chamber of Commerce, David Frost, said: “This deal is unacceptable from the standpoint of British business. Public sector pension liabilities stand at almost £700 billion and are expected to rise by 40% over the next 20 years. This places a tremendous strain on businesses and their employees at a time when many in the private sector are struggling to pay for their pensions and people are retiring later……We are now faced with a situation where public sector pension costs will continue to balloon and the private sector will pick up the tab.”

The Financial Times accused Ministers of ‘abject surrender’ and of effectively cutting the ground from underneath the Pensions Commission ahead of their final report which is due at the end of next month.

Meanwhile many of those commenting about the issues continue to confuse ‘retirement age’ with both ‘pensionable age’ and ‘state pension age’. The 3 terms are not necessarily synonymous, nor interchangeable.

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Jobcentre Plus Outsourcing To Increase

Even though she didn’t mention it during her speech at TAEN’s Conference last week, Margaret Hodge, Minister for Work at the Department for Work & Pensions, has confirmed that more of the work of the Jobcentres will be outsourced to the voluntary and private sectors.

The Minister told a reporter,”There is huge interest in this, and we are going to do it.”
She also confirmed that officials in her Department are working on proposals – although she gave no indication of the degree to which the job brokerage functions of the 650 or so Jobcentres in the country would be outsourced to others. However it seems likely that it will stop short of outright privatisation of the services.

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Week Starting 10th October

TAEN’s Annual Conference

Over 120 delegates came from across the UK to attend TAEN’s Annual Conference in London this week. The theme this year was ‘Profiting from Longer Lives – health, wealth and the pursuit of happiness….’

Five main themes were explored:- the quality of work and opportunities available to older workers, developing and sustaining employability throughout longer working lives, the importance of health in extending working lives, the forthcoming age discrimination regulations and the savings and pensions scene.

The conference, which was sponsored by Norwich Union, was also open to non-TAEN members and attracted a certain amount of media attention.

Click here for an overview in words and pictures.

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Redundancies Possible in One Third of NHS Trusts

Over the past few years recruitment into the health service has been bouyant but now amidst reports of overspending by many NHS Trusts, a new national recruitment survey by NHS Employers found that 10% of trusts who responded were anticipating redundancies in the next 12 months. A further 25% said they may potentially have redundancies.

The groups most likely to be affected were managers and the wider healthcare team

The survey also showed that:

86% of trusts who responded have hard to fill posts. The top three hard to fill posts are allied health professionals, nurses and midwives and doctors.
The most commonly used methods of recruitment among responding trusts are internal adver

tising and electronic recruitment via the NHS Jobs website with 70% of responding trusts using NHS Jobs to advertise all their vacancies.

Taen’s ‘Profiting from Longer Lives – health, wealth and the pursuit of happiness’ conference which is taking place in London on the 13th October, is sold-out.

Keith Frost, Taen’s Business Manager commented, “Whilst we know that many people are going to want – and need - to work on longer, more thought needs to be given to how we ensure that working on is a win/win, both for employers and individuals. We really don’t want to end up in a situation where individuals are forced to work on in jobs they don’t want to do, for employers who don’t want to employ them.”

The conference will also be considering the draft age regulations and be highlighting and discussing those areas which remain contentious. This should help inform delegates’ responses to the Coming of Age consultation on the draft regulations which closes on the 17th October.

Rt Hon Margaret Hodge, MP, Minister of State for Work at the Department for Work & Pensions heads a distinguished list of speakers.

Norwich Union, the UK’s leading pensions provider is sponsoring this year’s conference.

A new report says that 4 out of 5 employers have yet to begin their preparations for next year’s age discrimination regulations.

The report (Golden Oldies at 50) from employment law firm Eversheds and Cranfield School of Management found that just 1 in 5 employers of nearly 1100 surveyed, had even begun to prepare. Of the 80% who haven’t done anything so far, 50% expect to begin their preparations in the next 6 months.

Audrey Williams of Eversheds said that businesses have a mountain to climb in the next 12 months if they are going to change negative attitudes to age in UK workplaces.

“What is of particular concern is that these attitudes are present at the very top of organisations and among HR professionals, suggesting that some businesses simply won’t act until they are faced with a discrimination claim.”