Disability employment in London Nigel Keohane, Social Market Foundation February 2019

Why worry about disability employment For those who want and are able to work, employment can be important for the individual, in terms of their skills, socially and their economic independence. Longer lives mean need for extended working lives. Already many people leave the labour market early for reasons of ill-health and disability. The UK has historically performed poorly compared to advanced economies in terms of the proportion of its older working age population that leave employment due to ill-health or disability. The Government has reported that if 1% of Employment and Support Allowance claimants are helped into work, this would save the Exchequer £240m, and boost the economy by £260m. Employment rate is very high in the UK and productivity is low – making the most of the talents and skills of disabled individuals could strengthen the economy. Government target to increase employment of those with a disability by 1 million over a decade

Overview of work-limiting health conditions and disabilities in London Some 690,000 working age Londoners (13%) report having a work limiting health condition or disability. Breakdown of conditions for Londoners with a work limiting health condition or disability (2015)

Disability employment – an overview National stats (2017) UK Employment rate for non-disabled individuals = 87% Average disability employment rate = 45.5%. National disability employment gap = 41.5 percentage points. Varies significantly: 70% versus 35%. London stats Employment rate for non-disabled individuals = 85% Employment rate for disabled people in London = 46.5%. Around 370,000 disabled working-age Londoners are out of work. Disability employment gap in London = 38.5 percentage points.

Boroughs with lower disability employment rates also have bigger employment gaps Disability employment rate (%) and employment rate gap (percentage point), by London borough, 2015

The ‘Disability Employment Gap’ varies hugely across boroughs

Population of out-of-work disabled people in London sub-regions

The disability employment gap is falling but slowly The disability employment gap (percentage points) over time, in London and outside London This masks local variation – with the gap getting in small in the majority of London Boroughs but growing in some. Largely this occurred in Boroughs that already had high employment rates.

Only a fraction of disabled Londoners report that they want work

The majority have not worked in the last five years. Wider set of factors that affect employment of disabled Londoners A growing proportion report having a mental health condition (32% overall), and our previous work has shown that (compared to those without another work-limiting condition) those with a mental health condition are 30% less likely to find work within a year. The majority have low or no qualifications and have been out of work for five or more years. The prevalence of work limiting conditions and disabilities is particularly high in deprived areas, where labour market opportunities are harder to come by. The majority have not worked in the last five years.

Policy responses London well-positioned because it has devolved powers over health, skills and employment support. London-level initiatives such as the ‘Good Work Standard’ and the ‘London Healthy Workplace Charter’ Government taking range of employer-facing and individual-facing initiatives. The SMF has proposed: A Disability Employment Taskforce Allocating a part of the UK’s Shared Prosperity Fund to programmes Creating a £1 billion fund to finance pilot projects Reforming the national benefits system Reforming conditionality requirements so that the barriers to employment are better recognised Developing a new social insurance scheme to fund more generous income support when people are sick or disabled and invest more in reablement.

Questions that our analysis provokes What more can city government do to address disability employment? What can be done specifically to help older workers stay in work and return to work promptly after ill health? Does more need to be required of employers? And, if so what? How do we balance obligations on employers with encouragement to businesses to employ disabled individuals or those at risk of ill health? Are there specific technologies that could increase working opportunities for disabled individuals? What can we do to improve the quality of work for disabled individuals in London?