Evaluation of Scottish transitional employment services: interim report August 2018

Appendix 2 – Review of employability literature

We have undertaken a brief literature review of what is a very large area of research interest. This has been undertaken to consider:

• The scale and nature of the target customer groups for WFS and WAS and their current level of participation in the labour market
• Evidence on what works in supporting disabled people and those with long-term health conditions back into work

Prevalence of disability and long-term health conditions

Establishing the prevalence of disability and long-term conditions is not straightforward due to differences in definitions and limited data on how individual conditions combine. People are classified as disabled under the Equality Act 2010 if they have a physical or mental impairment that has a 'substantial' and 'long-term' ( i.e. longer than 12 months) negative effect on their ability to do normal daily activities. The SG's definition is that "Long term conditions are health conditions that last a year or longer, impact on a person's life, and may require ongoing care and support".

Depending on the source data, estimates of the prevalence of long-term health conditions vary widely. There are 647,000 people in Scotland (working age, 16-64 years) who have declared themselves as Equality Act disabled, almost one fifth (19.0%) of the population in Scotland, similar to across the UK (18.0%) ^[30] .

Other data sources report a slightly higher prevalence – the Family Resources Survey 2016/17 reports that 22% of the population (1.2m people of all ages) have a disability compared to 22% of the UK population ^[31] . The Scottish Health Survey 2016 reports that 33% of over 16s have at least one limiting long-term health condition. In 2007, Audit Scotland estimated that around a million people in Scotland had a long-term health condition ^[32] . Around 40% of people with a long-term health condition are not Equality Act disabled and this may explain the difference between the Equality Act estimate and those from other sources. This would suggest a population of around one million people in Scotland.

The Scottish Health Survey asks people about their long-term health conditions. Data based on health professionals' records tend to report lower prevalence because they exclude any condition that does not last 12 months or more. An analysis of the two sources in 2008 ^[33] found that SHS suggested 37% of people had one or more long-term health condition, whereas the same data restricted to conditions lasting 12 months was 28%. The exclusion of short-term conditions, such as back pain, may be a question of degree when considering an individual's ability to participate in the labour market.

The prevalence among working age adults (16-64) of a limiting long-term health condition is higher for females (35%) compared to 25% of males. Females represent 58% of all EA 2010 disabled people in 2016. Older age groups have much higher prevalence of long-term health conditions 45% of 65-74s and 60% of the over 75s. Females have higher prevalence rates in every age group from 16-24s to 65-74s ^[34] . In 2016, this amounted to some 600,000 females and 470,000 males in Scotland aged 16-64, a total of just over one million or 27% of the working age population. A further 280,000 females (14%) and 230,000 males (12%) reported non-limiting long-term health conditions.

Depth of need

The costs of long-term health conditions for individuals and society is very large. Long term health conditions are the primary driver of demand for health services (80% of GP appointments and 60% of bed stays in hospitals and the major cause of mortality ^[35] ). Expectations are that these conditions will continue to increase following recent trends.

After housing costs, the proportion of working age disabled people living in poverty (28%) is higher than the proportion of working age non-disabled people (18%) ^[36] . Living costs are frequently higher because of their health condition and there is evidence that even those in work suffer from lower pay rates with pay gaps between 15% to 28% depending on their disability ^[37] .

According to ONS data, the employment rate for disabled people was 42.8% in 2016 while the employment rate for not Equality Act disabled was 80.2%, a gap of 37.4%. Equality Act disabled are less likely to be in full-time employment ^[38] .

In 2016, around 287,000 disabled people were in employment aged 16 years and above, which was 11.1% of the total number of people 16 years and above employed in Scotland. Older workers in the 50 to 64 age group have the largest employment gap with 36.2% in employment compared to 80.3% of their non-disabled counterparts. Female disabled have a slightly higher employment rate (43.3%) and a lower non-disabled employment rate, so their employment gap is lower (33.2%) ^[39] .

A recent report ^[40] highlights significant sub-regional variations, with areas that enjoy high employment rates also having higher disability employment rates even when controlling for other factors (education, etc). Ex-industrial areas, therefore, tend to have lower employment rates and even lower disabled employment rates. Scotland, outside of Strathclyde, has above average employment rates for both disabled and non-disabled people, but Strathclyde is the third worse performing area in the UK.

Lifestyle behaviours have a major impact on long-term health conditions – smoking, alcohol consumption, limited exercise and poor diet – all contribute (but are not the only cause of such conditions). Almost twice as many people aged over 16 report limiting long-term conditions (21% cf 40%) when they have two or more risk factors from their lifestyle compared to those who have none. These risk factors vary considerably by income with the lowest income groups having double the proportion with two or more risk factors (40%) than the highest income group (20%) ^[41] .

The link between limiting long-term health conditions and disadvantage has been known for some time. Barnett (2012) using Scottish health records data found that people living in the most deprived areas faced an onset of multimorbidity 10-15 years earlier when compared to the most affluent. Socioeconomic deprivation was particularly associated with multiple health conditions that included mental health disorders.

If you have one long-term health condition then you are more likely to have another, particularly among older age groups. APS 2016 data suggests that 41.3% of working age disabled people in Scotland have three or more conditions, somewhat above the level in the UK as a whole (38.7%) ^[42] .

Multimorbidity is a concern because as a more recent study found, patients with multi-morbid diabetes, arthritis, neurological, or long-term mental health problems have considerably lower quality of life than other people and demand more complex care. The same study found that, with the exception of neurological conditions, the presence of a comorbid mental health problem had a more adverse effect on Health Related Quality of Life measure than any single comorbid physical condition ^[43] .

Other analyses suggest that different health conditions are more or less associated with multimorbidity.

Figure A2 Multimorbidity: Number of co-existing long-term health conditions

Source: Measuring Long-Term Conditions in Scotland (June 2008): Information Services Division, NHS Nations Services Scotland: Practice team information year ending March 2006, using conditions lasting more than one year.

A number of factors have been identified as being associated with higher or lower employment rates for people with disabilities:

• Limited social connections and income disadvantage
• Lower qualifications (something which is seen as a distinct feature of the UK's situation in the international literature) and the type of condition and comorbidity
• Mental health conditions (which are higher in Scotland) have the lowest employment rates
• Multiple conditions (again, Scotland has a higher proportion with 3+ conditions than UK (41.3% cf 38.7%). An aging population over the next decade will only serve to increase the proportion of people with multiple conditions.

An Opinium survey of 2,000 disabled people commissioned by Scope to launch the campaign found that when applying for jobs only half of applications result in an interview, compared with 69% for non-disabled applicants. Disabled people also, on average, apply for 60% more jobs than non-disabled people in their job search (on average 8 applications compared with 5). Despite equalities legislation, disabled people face significant barriers in employer perceptions of their potential contribution and the perceived additional costs of employing someone with a disability or health condition. One in five employers reported that they were less likely to employ a disabled person. ^[44]

As a result, just under half of employed disabled people and those with long-term health conditions do not feel confident about sharing information about their impairment or condition with their employer. ^[45] The situation is likely to be less encouraging in these circumstances for those seeking work.

The evidence base provides no definitive statement on what works for whom ^[46] . However, summaries of the literature do point to key features that are associated with better employment outcomes for people with disabilities seeking work:

• Actions that are most effective in terms of entry into jobs on the open labour market include supported employment programmes, characterised by intensive personalised support to help individuals into and when they first move into work.
• Key elements of success include having specialist 'job coaches' or employment advisers, ensuring close links with employers and the availability of structured long-term support whilst in work.
• Initiatives that are most successful: take an integrated approach to skills development, training and job placement, include individualised plans, ensure that training is employment focused – sometimes in relation to specific jobs, and have close links with employers.
• The Individual Placement and Support ( IPS) model was often identified as most effective in securing employment for more days, for more hours and with higher retention rates for longer periods than those assigned to vocational services. However, these were recognised as high-quality, high-cost delivery that should be made available only to those with significant needs.
• General employment programmes ( e.g. focused on job search and support) can be effective in improving disabled people's employment chances, but more successful programmes often include a supporting/trusting adviser relationship, a balance between specialist and mainstream provision and access to other types of support where appropriate.
• General training programmes prior to work are less successful in securing employment, with limited evidence of the effectiveness of vocational training or voluntary work.
• Evidence of the effectiveness of incentives to enter employment was limited, with some positive impacts found for in-work payment schemes and work trials allowing claimants to retain their eligibility for benefits. Some positive evidence was found for health-based interventions such as CBT to help manage conditions, but a focus on both health and employment is key.

OECD research found that the combination of benefit regime, varied investment in ALMPs and 'narrow' policy designed for one specific group being applied to a more heterogeneous client group was a cause of the limited outcomes to date. Key findings are:

• Trusting relationships between claimants and case managers is key to success in overcoming claimants' concerns and building confidence about going back to work ^[47] .
• Guidance and counselling alone are not enough to help people into sustained employment. This support needs to be enhanced by other elements of intervention ^[48] .
• There needs to be a balance between mainstream services and the provision of specialist knowledge and support for particular groups. In particular, it is important that disabled people are able to access mainstream services. Some countries have tried to address this balance. Denmark, for instance, has one expert for disability employment in each employment office, as well as one dedicated, central office focusing on the needs of disabled people. New Zealand provides special funds to develop innovative services that can be more finely customised to the varying needs of persons with disabilities ^[49] .
• A key element of the process should be a systematic profiling of clients' work capacity, as in Australia and Norway, combined with the facility for a swift referral to the most appropriate service, if required.
• According to the OECD ^[50] , for people with mental health conditions, identification of conditions is important. The report states that public employment services in OECD countries generally have no particular tools for identifying mental ill-health and no corresponding statistics either. This is particularly problematic, given that many people with common mental disorders are claiming mainstream out-of-work benefits (as opposed to sickness/disability benefits).
• Early intervention (pre-benefit if possible) is important for cases of sickness absence at risk of becoming long-term, and in particular for mental health conditions. This report notes that the start of a benefit claim can often be a long time after the individual has become sick and left work. At this late stage, return-to-work programmes are less likely to succeed. According to the report, the evidence shows that such programmes are likely to be more effective at a much earlier stage, ideally at the very first longer-term sick leave for reasons of mental ill-health and at a time when work motivation is high. Some countries have introduced ways of intervening before a benefit claim is made. In Australia, after a certain period of prolonged sickness absence, the person is called in for an assessment of both work capability and support needs. Other countries, such as Finland and Denmark, have introduced a categorisation so as to better identify cases at risk of developing into long-term absence ^.

Similar findings were reported from a review of employment interventions for people with long-term conditions ^[51] :

• Health and social care interventions generally have a positive effect on employment for those with mental health problems, although no evidence currently exists in this area for physical conditions. Anti-depressant medication, CBT and combinations of treatments were all found to improve employment outcomes.
• There is limited robust evidence on the sustained impact of interventions with very few studies considering employment outcomes over an extended period but some evidence (identified elsewhere) that outcomes depend on growth in the wider economy.
• Employment was not found to be a universal benefit to people with long-term conditions, especially in low-quality employment with limited control and flexibility. In these cases, employment will not be sufficient to raise their quality of life and additional support may be required to enable them to remain in employment while managing their health condition.
• Those who acquired long-term conditions were found to be more likely to lead to an individual leaving the labour market ^[52] . This was particularly the case for older people and those with lower educational qualifications. However, the magnitude of this relationship is influenced by a number of other factors, some of which can be altered by government policy, such as employment rehabilitation measures and the benefits system.

Early intervention is key to prevent falling out of work. This is particularly important as most disabled people and those with long-term health conditions acquire their impairment later in life (some 17% are born with their impairment) ^[53] .

There is strong evidence that early intervention is central to retaining employees who are on sick leave for extended periods. By the time they move to sickness benefits it can be too late. The Resolution Foundation ^[54] reported that a disabled person's chances of re-entering employment were 6.5 times lower after a year than in the first 12 months.

Key findings

This brief review suggests a number of key issues:

• The customer group is significant and growing, particularly so in deprived areas
• Needs are becoming more complex, especially for older age groups who more often have multiple health conditions
• Those over 55-64 may see the onset of these conditions as reason to retire from the labour market, especially if they have fewer educational qualifications
• Trusted, intensive support employability linked to specialist services do make a difference to employment outcomes
• Evidence is more mixed but suggest longer-term support may be required to help sustain participation in employment
• The quality of employment may also play a role in supporting improved quality of life for people living with conditions
• Early intervention is key to supporting those who do acquire health conditions while they are in work to prevent them leaving the labour force