Policy View: Moving into work: realities of the cost-of-living crisis

By Henry Foulkes

People furthest from the labour market often have a myriad of issues that need to be worked on all at the same time. The cost-of-living crisis has exacerbated the problems and choices they face.  

The rising costs of energy, food, fuel and housing alongside stagnant pay and loss of earnings when claiming in-work Universal Credit has changed the attitudes of people moving back into employment.  

From back to work to making ends meet 

Employment support organisations assist people furthest from the labour market back into paid work.  The cost-of-living crisis has changed the conversation, from back to work to making ends meet. And providers who support them are having to change their practices to best assist them. 

For instance, Gloucestershire County Council told ERSA that their discussions with adults are now focused on how to support them with cost-of-living issues, rather than employability support to get them a job or support to go on a training course to help get a job in the near future. 

Another ERSA member, The Growth Company, has set up food pantries and clothing banks in all their offices to help support people further. They have made it a priority to upskill their employment advisors so they can help participants with urgent signposting to food banks, benefit calculators and mental health services.  

The security of out-of-work universal credit 

The cost-of-living crisis has meant that out of work people are incredibly scared to stop receiving or reduce their Universal Credit. During immense financial worry for many people, they are rightly apprehensive to move away from this safety net and potentially miss out on new targeted support to enter low-paid, insecure employment.  

The cost-of-living and the cost-of-working crisis  

Additionally, the cost of work itself is a factor as to why people have been reluctant to enter the workforce. Costs such as travel, work clothing, childcare, and even getting a form of ID which proves an individual’s right to work in the UK, are stopping people from starting a job. There are measures available in Job Centre Plus (JCP) for jobseekers who need support with these costs but many people furthest from the labour market do not turn to JCP for help. 

Helping older people back to work 

Many older people left the labour market during the pandemic. The cost-of-living crisis might force them to find work – through financial necessity – but it is important to consider how they can be identified and then helped into employment. 

Gloucestershire County Council have received feedback from their Integrated Locality Partnership health team that some older patients are considering the need to return to work.  

These older patients are looking to return to the workplace as they cannot afford their retirement, but as they may have poor health and/or outdated skills, they need holistic and tailored support to help them back into the labour market. 

These changes in economic circumstances are being considered by some commissioners and organisations, with some programmes already focusing on supporting those in-work. 

In Liverpool, Transform Lives Company (TLC) is running a programme called Workology, which offers 5 weeks of support to give people in work and struggling easy access to additional help in dealing with issues such as fuel poverty and housing support.  

Signposting people to relevant services will be a big part of this programme but TLC is also offering coaching to help identify new possibilities. For example, coaching can help explore whether higher pay, greater job security and leaving zero-hour jobs is an option; look at enhancing CV skills, knowledge of the ‘hidden jobs market’ and transferable skills; and continue to focus on mindset, confidence and anxiety. 

Similarly, The Growth Company’s Max Your Money programme is a result of the cost-of-living crisis. It is aimed at people who are either out of work, in work, or self-employed. The programme offers tailored support and can help with areas such as skills training and career advice, information and guidance. 

Impact on the employability workforce 

It is also important to acknowledge the staff within the employability sector itself. Employment support organisations, and the staff within them, are vital to supporting people throughout the cost-of-living crisis, but it is integral that staff are supported through the crisis, both financially and with any mental health needs.  

Supporting the employment support sector 

Employment support organisations can support people back into the labour market and offer in-work support, but this won’t be possible without sufficiently funding the organisations within the sector.  

With the end of the European Social Fund and a gap before the UK Shared Prosperity Fund can begin to focus on employment support, the government should look to reinvest the projected underspend on existing government programmes like Restart, to help boost and support the labour market. 

Autumn Statement 

The Chancellor, Jeremy Hunt, has already promised that support to help people back into the labour market will be included in the upcoming Autumn Statement on Thursday.   

Not only must the employment support package help those in work who are struggling with the cost-of-living crisis, it must also assist those furthest from the labour market with the support they need to find secure employment.   

Henry Foulkes is a Labour Market and Policy Researcher at ERSA