Federation of Small Businesses: The job centre isn’t working: reform Jobcentre Plus to tackle unemployment, FSB says

The Jobcentre Plus must be urgently reformed and equipped to tackle rising unemployment, said the Federation of Small Businesses (FSB), following research showing one in three small businesses find Jobcentre Plus ineffective.

According to a survey of 2,500 FSB members, 34 per cent said they found Jobcentre Plus ‘ineffective’ or ‘very ineffective’, while another 49 per cent did not even know if it worked well or not.

With unemployment set to rise to three million by the end of the year, and the number of under-25s on job seekers’ allowance having risen by 80 per cent in the past year, it is clear that urgent action is needed.

In another FSB survey, nine per cent of respondents said they planned to take on more staff in the next six months, despite the recession – which would amount to more than 400,000 new jobs. It is well known that small firms are the country’s job-creators, with 84 per cent of new jobs across the EU created by small businesses between 2002 and 2007.

A new FSB report, entitled The job centre is not working, sets out recommendations for reforming Jobcentre Plus from an organisation that appears focused on processing benefits applications to one that supports work. Fewer than 20 per cent of small businesses said they used Jobcentre Plus to recruit, using instead costly advertising and recruitment services. On the 100 year anniversary of the establishment of the job centre, the FSB proposes the Government:

– Establishes links between Jobcentre Plus, Businesslink and skills boards, to create a focus on business needs and the skills needed for local employment;

– Appoints a dedicated small business manager in each Jobcentre, who understands the specific circumstances and needs of small firms;

– Commissions research to examine how funding allocated to unemployment, training and business support initiatives is spent;

– Overhauls the Jobcentre Plus website, to make it fit for 21st century online recruitment.

The FSB’s report is released ahead of the Liberal Democrat, Labour and Conservative party conferences over the coming weeks, at which the FSB will have a stand in the form of an employment centre, with a focus on small businesses – the country’s big employers.

John Wright, National Chairman, Federation of Small Businesses, said:

“FSB members feel let down by a service which appears to offer them precious little for the £3.36 billion Jobcentre Plus spends each year. As small businesses are the country’s key employers, and are known to give a larger proportion of jobs to those who have previously been unemployed than big businesses, it’s time the Government reformed Jobcentre Plus and made it work effectively. The FSB is concerned the lion’s share of funding from Jobcentre Plus currently goes to large companies and multinationals, which would still provide training if public funding were not available.

“Small businesses are big employers, and with 57 per cent without employees keen to employ people in the future, they must be given all the support they need to create jobs, and so effectively tackle the problem of rising unemployment head-on.”