North’s jobless rate the biggest challenge

A new scheme, backed by £2.2 million of public money, is to be rolled out in Northern Ireland to help 160 people who have been out of work in one of the worst areas for unemployment in the UK.

The “Work Ready West” initiative is intended to help people who have been without work for more than 12 months in the Fermanagh, Limavady, Omagh and Strabane district council areas.

It will give 160 long-term, unemployed participants the chance to experience 50 weeks full-time, paid work with a local employer. But what happens after the 50 weeks are up? Will the glorified placement scheme translate into real jobs?

Organisations from local solicitors Scott & Ewing to Asda and American insurance giant Allstate have signed up to participate.

While this may offer some hope to the 160 people it is not just the Northwest that has a problem with long-term unemployment. Latest figures show the North’s long-term jobless rate between February and April of this year was 64.5 per cent – the UK average is 32.3 per cent.

Welfare reform

The majority of people who are out of work in Northern Ireland – and official labour market figures estimate that over the three months to April the total was 54,000 – have been looking for a job for at least, 12 months.

But that is not quite the end of the depressing picture. It is a very small slice of a bigger problem that has a stranglehold on the North’s economy and one which is directly related to the current political crisis over welfare reform.

Latest Government figures show that in the three months to April of this year there were 315,000 people in Northern Ireland who were “economically inactive”. These are people who are neither in employment or unemployment – they could, for example, be carers or be students or retired.

Among these 315,000 cases are people who will never be able to work and there are at least 17 per cent who actively want a job. But out of them there are an estimated 33 per cent classified as sick/disabled.

This large percentage represents one of the biggest economic challenges facing Northern Ireland and it is also one of the key reasons why welfare reform has become such a battlefield. One in 10 of all adults between the age of 16 and 64 in the Northern receive some form of disability benefit. Strabane and Belfast have the highest claimant rates of anywhere in the UK. Last month the total number of people claiming disability benefits was estimated to be 203,790, up 7,400 on the previous year.

Massive bill

Obviously this represents a massive bill for the UK government – one it is not happy to pay anymore – as seen in the welfare reforms which it claims “are returning fairness to the benefit system and encouraging people who are able to, to move into work”. But the Northern Ireland Council for Voluntary Action has claimed that in their current shape the reforms will strip £750 million out of the economy each year.

So what is the solution to the current political deadlock and the challenge posed by economic inactivity?

Perhaps the easiest way forward for political leaders would be to ask the right questions to begin with? Like why do so many people who are able to work not want a job?

According to Richard Ramsey, Ulster Bank chief economist, Northern Ireland, they may have to travel back to the time of the Belfast Agreement to find the answer.

He says the North’s economic inactivity rate then was around 29 per cent. “It peaked at 31.9 per cent mid-2000. Fast forward to early 2008 and Northern Ireland’s economic inactivity rate was still at or just below 29 per cent.

“So there was no notable improvement in economic inactivity. For whatever reasons, Northern Ireland has been unsuccessful in reducing economic inactivity to any great extent. A logical conclusion from this is that the combination of the welfare system and policies addressing skills and education deficiencies have been deficient.