DWP’s preparations for changes in the world of work

While there is a broad consensus that new technology is unlikely to result in mass unemployment, it will lead to the loss of some jobs and the creation of entirely new ones. Some sectors will experience the impact of new technology more profoundly than others, and for some these changes have been accelerated by the pandemic. The retail sector, for example, has already seen the loss of many traditional “high street” roles, but the growth in e-commerce has led to the creation of new jobs.

We heard evidence that DWP has not been proactive enough in planning for long- term changes to the world of work, and that it has largely reacted to change instead of planning ahead for a range of different scenarios or developing a long-term strategy. Working with other departments, DWP should develop a strategy for how it intends to respond to long-term changes in the labour market. This should set out how the Department will plan for different possible scenarios. The strategy should include how DWP intends to respond to the impact of new technology on the number of available jobs, the skills needed to perform these jobs, and the differential impact that changes could have between sectors, regions and demographic groups.

New technology has the potential to enhance employees’ experience of work; for example, by allowing for greater use of remote working and replacing more mundane tasks. However, there is also a risk that technology could have an adverse impact on workers’ rights and wellbeing. The strategy we have recommended should also set out how the Government will safeguard employees’ rights and wellbeing and ensure that available jobs are of good quality.

Responsibility for responding to changes in the world of work does not sit with one department. DWP told us that it works with other government departments to help fill roles in sectors where there is growing demand: for example, with DHSC on filling vacancies in social care, or with BEIS on jobs in the green economy. We want the Department to be proactive in planning ahead. On top of this work, DWP should take a more strategic approach to engaging with other departments—for example DCMS, as the department responsible for digital, and BEIS—to identify sectors which may face increased demand in the future. We also urge the Department to work closely with MHCLG and other Departments on the Levelling Up programme, including on projects like the Towns Fund and Levelling Up Fund, to ensure that areas most exposed to loss of jobs from automation are prioritised for investment in skills and new jobs.

We welcome the Government’s announcement that it will publish a new AI Strategy later this year that will focus on economic growth through widespread use of digital technologies and on developing every adult’s digital skills. DWP should work closely with DCMS and BEIS on the development of the Strategy. It should ensure that the Strategy sets out how the Government will respond to the impact of AI on the labour market. (Paragraph 36) DWP’s preparations for changes in the world of work 49

The Government has committed to introducing an Employment Bill in this Parliament which will “build on existing employment law with measures that protect those in low-paid work and the gig economy”. In our earlier report on DWP’s response to the coronavirus outbreak, we recommended that the Government should bring forward the Bill as soon as possible. We were therefore disappointed when the Bill was not included in the Queen’s Speech 2021. Given the significant changes in the employment market over the last decade, we believe it is imperative that the definition of employment is updated and clarified to ensure that workers enjoy the legal status that they are entitled to. This is not only key in protecting workers in times of change but also in ensuring access to skills training provided by or in conjunction with employers. We also urge the Department to work with HM Treasury to ensure the definitions of employment for tax purposes are consistent with those for employment law and to end the tax incentives for disguising employment as self-employment. The Government now says simply that the Bill will be introduced “when the time is right”—but it is not at all clear when that might be. We recommend that the Government should, as a matter of urgency, set out a timescale for when it will introduce the Bill. We also recommend that this be published in draft this session to enable pre-legislative scrutiny of the Bill.

We have heard concerns that there is a lack of real-time data on how quickly employers in the UK are adopting new technology. If DWP is to respond effectively to changes in the world of work, it needs a stronger evidence base about the real-time impact of new technology in the workplace. We recommend that, as a starting point, the ONS should add questions about technology adoption to its Annual Business Survey, as the Institute for the Future of Work has suggested. Possible questions could ask about the purpose of adopting new technology, and whether this has affected the number or nature of tasks performed by humans.

As change leads to the emergence of new jobs and changes to existing ones, the Government must ensure that it is monitoring the impact of change on the quality of jobs, not just the quantity. Studies such as the Skills and Employment Survey have been a useful source of data on job quality in the past. The Government should fund the next round of the Skills and Employment Survey, which is expected to be re-run in 2022–23. The Department for Education has funded the Survey in the past, but the next round could be funded by DWP, or by more than one department. DWP should also consider whether further methods of collecting data on job quality are needed. Working with the Department for Business, Energy and Industrial Strategy, it should also consider whether there is a case for adopting a new framework for measuring job quality or modifying its existing measure. (Paragraph 45) Impact of long-term changes on different groups

New technology, especially assistive technology (AT), has the potential to expand disabled people’s access to the labour market. However, take-up and knowledge of AT is still low. DWP should do more to improve knowledge and take-up of assistive technology amongst employers. Our predecessor Committee recommended that the Government should bring together a consortium of AT developers and entrepreneurs to achieve this. The Government did not act on this recommendation at the time, so we reiterate it now. The Government should also work with technology companies and 50 DWP’s preparations for changes in the world of work employers to ensure that future jobs are accessible for disabled people.

DWP must ensure that its digital skills offer is accessible and inclusive for disabled people. It should set out how it intends to increase the proportion of disabled people who benefit from its support and commit to publishing data on this.

Changes in the world of work will affect some groups of people more significantly than others. We heard that automation has the potential to exacerbate existing inequalities—but that does not have to be the case.

The employment gap between White and BAME workers remains too high, despite the Government’s intent to reduce it. There is a risk that the gap will widen if, as some predict, automation affects some ethnic groups more significantly than others. Automation may also have a differential impact on men and women. Women are still underrepresented in STEM fields, which are likely to see rising demand for workers. Women are also more likely to work part-time, with part-time work more common in low paid jobs, which are more likely to be lost to automation. These are complex issues to which there are no straightforward solutions. The impact of changes on different demographic groups will be uneven, and when formulating policy in response to change, the Government will need to draw upon expertise from a diverse range of sources.

We recommend that, as part of its commitment to levelling up, the Government should establish a new publicly funded advisory body of experts with a focus on the potential impact of changes in the world of work on different groups in the labour market. The Government should use the now-closed UK Commission for Employment and Skills as a model for what it could look like: that is, a publicly funded but independent body whose membership could consist of employers, trade unions, training providers and representatives from the third sector. The role of this new body should be to produce intelligence about the impact that changes such as automation may have on different demographic groups, including those that are most likely to experience the effects of these changes, and provide advice and make policy recommendations to the Government on that basis. It should work with and provide guidance to employers, including about how they can increase the diversity of their workforce through changes to their recruitment practices, such as encouraging more employers to adopt name- blind recruitment. (Paragraph 66) Short-term changes

The pandemic has accelerated the take up of new technology in the workplace, and it has led to a growth in remote working. It is likely that some of the changes to working patterns and practices will remain in place once the pandemic has ended. Remote working has both advantages and drawbacks, for employers and workers alike. The Government should monitor and publish an analysis of the impact that the pandemic is having on the take-up of new technology, working patterns and job quality. It should pay particular attention to the impact of the pandemic on disabled people’s employment.

The shift to remote working has had significant ramifications for people with caring responsibilities. We heard evidence that the number of men undertaking DWP’s preparations for changes in the world of work 51 unpaid childcare has increased during the pandemic. Increased volatility in the labour market has resulted in more people transitioning between jobs, meaning that some parents have missed out on entitlements such as paternity leave. Future changes may lead to greater disruption in the labour market, which in turn may affect new parents’ entitlement to parental leave and benefits. The Government must ensure that support for parents keeps pace with changes in the labour market. We recommend that DWP should consider the potential benefits of introducing a day one right to paternity leave and an equivalent of Maternity Allowance for new fathers and adoptive parents. It should work with other government departments and stakeholders to explore how this could be achieved.

Unemployment has risen because of the pandemic, but some sectors have been hit harder than others. Sectors which have seen the highest proportion of job losses are those that have been “shut down” in response to the pandemic, such as arts and leisure, retail and passenger transport. Some groups of people are also more likely to have lost their jobs, including disabled people, young people, women, low-paid workers and workers from BAME backgrounds. We welcome the announcement of two new employment support schemes: Restart, aimed at the long-term unemployed, and Kickstart, aimed at young people on Universal Credit. But neither scheme has specific provisions for disabled people, and we have heard concerns from disability organisations about how well they will work for disabled people in practice. DWP must ensure that both schemes meet the needs of groups who are particularly likely to have lost out during the pandemic. To do that, it will need to collect better data than it currently has.

The Department will, however, be limited by longstanding deficiencies in the collection and storage of data about Universal Credit claimants. The Department has told us that it does not have the mechanisms within the Universal Credit system to collect real time demographic data about participants in the Kickstart and Restart schemes. This means that the Department will not know the outcomes and experiences of different groups of people, including disabled people and people from BAME communities, on Kickstart and Restart until an evaluation is published once the schemes have closed. The same will be true of any employment support schemes linked to Universal Credit.

We reiterate our recommendation, first made in October 2020, that the Department should immediately make improvements to the Universal Credit system to enable it to record and use data about claimants’ characteristics. Without those improvements, the Department cannot effectively measure in real time how well the Restart and Kickstart schemes are working for different groups. The Department should set out, in response to this report, when it expects to achieve this.

We welcome the steps that DWP has already taken to ensure that jobseekers can develop the skills they need in a changing jobs market. We were encouraged by the Minister’s comments that DWP is working with the Department for Education on its National Skills Fund and the delivery of digital boot camps. But the UK is still facing a significant digital skills shortage, and demand for new skills will only rise as the labour market changes. The Government must ensure that the workforce 52 DWP’s preparations for changes in the world of work is equipped to respond to this challenge. DWP must continue to work closely with DfE to ensure that its skills programmes reflect the changing needs of employers and demands of the labour market.

In written evidence, DWP said that it intends to expand its skills offer. In response to this report, it should set out its plans in detail. In particular, it should explain how its offer will focus on the skills for which there is increased demand, particularly digital and AI skills. It should ensure that its offer is not just aimed at people who are in the early stages of their career, but at older workers who may also want or need to retrain.

DWP should set out a plan for how Jobcentre Plus can work more closely with partners—including local authorities, local enterprise partnerships, employers and education and training providers—to ensure that its skills offer is aligned with the needs of the local labour market.

It is essential that Work Coaches have a detailed understanding of the local labour market. Business engagement is a key route to understanding the changing jobs market and the nature of skills that employers are looking for. We heard evidence, however, that Work Coaches often do not have the capacity for business engagement on top of their other duties, and that it is not considered a priority. The Minister acknowledged this issue and said that she is keen to address it. DWP should ensure that new Work Coaches receive specific training on business engagement. All Work Coaches should be encouraged to and given time to undertake business engagement alongside their other duties. This should be incorporated into Work Coaches’ performance objectives and considered during performance reviews.

We welcome the fact that DWP has recruited 13,500 additional Work Coaches in response to the pandemic. DWP should continue to assess whether the number of Work Coaches is sufficient, and commit to recruiting more in the future if demand rises. It should also ensure that there are enough Jobcentre Plus staff with specialist skills. The Department recently announced the recruitment of 315 new Disability Employment Advisers, which is welcome, but it should assess whether this number is enough and commit to hiring more or upskilling existing Work Coaches if necessary.

As well as impacting the labour market, the adoption of new technology is likely to affect the way DWP delivers its services. As DWP moves more of its services online, it must ensure that people with low digital literacy, who may struggle to access its digital services, can continue to access face-to-face support and in-person services. It should ensure that services that help people access benefits, such as Help to Claim, have the resources they need, and that they receive additional funding if demand increases. DWP should develop a plan for how it will work more closely with third sector organisations that support claimants to ensure that they can continue to access DWP’s services.

The evidence we have heard suggests that changes such as automation are unlikely to lead to mass unemployment. That does not mean that there will be no displacement at all, especially as job roles and requirements change, and it is vital that people who do find themselves out of work have access to a robust safety net. Some people DWP’s preparations for changes in the world of work 53 have argued that a Universal Basic Income could act not only as a safety net for the unemployed, but also provide people with underlying financial security should they decide to undertake training or start their own business. A Universal Basic Income would, however, be extremely expensive, and would not target support at people who need it most. Instead, it risks diverting resources away from the existing social security system and other vital public services. We are not convinced that it would be the right way forward for social security in the UK. Instead, we recommend that the Department should focus its efforts on ensuring that the value of benefit payments under the current system are sufficient to meet claimants’ basic needs. (Paragraph 140) 54 DWP’s preparations for changes in the world of work