Wednesday, 5 August 2009

Don't look a gift horse in the mouth?

It is odd that a huge drop in the level of long-term unemployment in Hackney remains largely unexplained. In 2005, 2006 and 2007 the total working population of Hackney was constant at around 140,000. Over the same period the level of long-term unemployment fell from 47,100 in 2005 to 26,900 in 2007 - that is a fall of 43%.

The extraordinary thing about this drop is that the people who appear to have gone back to work were the people who had, for years, not even been looking for a job. This section of the unemployed population has even been rebranded and is now described as suffering from "worklessness".

So, getting 20,000 of these sufferers of "worklessness" back to work in a three year period must have been a huge achievement. But for some reason this feat remains unexplained. This is strange because the blight of "worklessness" was highlighted as the council's top priority earlier this year. As such, a staggering, unprecedented even miraculous fall in the borough's long-term unemployment rate might be worth explaining.

Luckily you don't have to take my word for the significance of the fall in 'worklessness' - it comes from two documents which rely on Office of National Statistic figures (ONS). One is the October 2008 "Economic Profile" of the borough - which I have failed to find online - the other is the earlier May 2008 “Labour Market Statistics Update Briefing" - which I can't find online either.

The May 2008 “Labour Market Statistics Update Briefing" raised questions about the cause of this fall in 'worklessness'. It said: “Hackney now has the highest level of employment and lowest rate of economic inactivity of any year for which data are available, and the improvement is far steeper than anything experienced by any of Hackney’s statistical neighbours.”

And it asked: “So what might have happened in Hackney to explain (or support) the trend shown in the APS figures?"

It emphasised the size and potential significance of the data: “The difficulty is not explaining the direction of the trend, but the scale of it."

And it suggested that the answer may not be straightforward offering demographic changes or "sampling variability" (the figures from the Office of National Statistics were from a narrow survey but ONS said that it stood by the results) as possible explanations for the change.

The May report suggested that it would be sensible to find out what had happened: "Options for carrying out further analysis, including with partners such as Jobcentre Plus to analyse benefits data and trends, could be explored in order to cross-check the trends shown in this paper and to shed more light on what is happening in Hackney’s labour market – particularly if we are to help ensure that the trend continues.”

The later October report made no mention of these questions but pointed out that the trend had not continued. It mentioned that the employment rate had risen to the "highest rate on record (64.3%), significantly closing the gap between Hackney and London" but pointed out that it fell back to 63.1% in December 2007.

At the moment it seems as if this dramatic fall in worklessness and rise in employment - not seen in any other borough - remains a mystery.

The fact that it remains a mystery is odd because, in January 2009, the council said that 'worklessness' was a top priority.

The Community Safety and Social Inclusion Scrutiny Commission’s “Growing a Local Economy” report, approved in January, said:

“The review revealed the key challenge the borough continues to face in tackling the problem of worklessness. We heard evidence on the scale of this problem and on the range of interventions being led by partners such as Job Centre Plus.

“The contribution of enterprise growth to tackling worklessness was explored and we as a Commission have agreed that “Tackling Worklessness” merits greater attention and therefore, it will form the subject of our next review, which will commence in October 2008.”

It is not yet clear whether the mystery of the 43% drop in 'worklessness' has already been answered or if it has been ignored by the council's economics department. Will Hackney Council answer these questions?

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