Professor Kim Hoque et al – written evidence (YDP0056)

SUBMISSION TO THE PUBLIC SERVICES COMMITTEE INQUIRY: THE TRANSITION FROM EDUCATION TO EMPLOYMENT FOR YOUNG PEOPLE

SUBMITTED BY DISABILITY@WORK

Introduction

Disability @Work is a team of academic researchers with longstanding interest in disability disadvantage in employment, and have researched and published widely in the area. We are a founder member of the Disability Employment Charter. We are submitting evidence as we believe our understanding of the barriers disabled people in general face in organisations, and the steps government might take in reducing those barriers, will help inform efforts to address the employment disadvantage young disabled people encounter.

1) What barriers do young disabled people face when leaving education and entering the job market and workplace? Does this differ between different conditions or disabilities, and if so, how?

A key barrier is that many employers lack the practices that might improve (young) disabled people’s experience of the hiring process, and their subsequent experience of employment.

This is demonstrated most clearly by the government’s 2011 Workplace Employment Relations Survey. This is the latest data available, and is nationally representative of all British workplaces with 5 or more employees.

The data shows that although many workplaces have formal written disability equality policy statements, many have not adopted disability equality practices to underpin such statements. Table 1[1] shows that 38% of small firms; 69% of medium-sized firms and 84% of large firms have a disability equality statement. However, only 5% of small firms, 16.5% of medium firms, and 19.5% of large firms monitor recruitment and selection by disability. On average, small firms have adopted just 0.5 of the 7 practices asked about in Table 1, medium-sized firms have adopted just 1 of the 7, and large firms have adopted 1.15 of the 7. This suggests many disability equality statements in British workplaces are ‘empty shells’[2].

Table 1: Disability equality policy and practice adoption in British private sector workplaces

All private sector workplaces

WERS 2011 data

6a) What could public services employers learn from best practice elsewhere, including overseas, about recruiting and retaining young disabled people? What are the barriers to implementing such good practice?

It should be noted that public services employ proportionately greater numbers of disabled people than the private sector (see below)[3], hence may themselves provide best practice examples from which others might learn.

Proportion of people in employment by disability status and sector, employed people aged 16 to 64, UK, 2021/2022[4]

Source: Annual Population Survey

The public services also have higher union recognition, which can also help encourage best practice. Disability equality practices are more widely adopted in unionised than non-unionised workplaces, particularly where negotiation and consultation over equality takes place.[5] This highlights the importance of public services employers engaging meaningfully with their unions on equality matters.

Studies also highlight the effectiveness of union Equality Representatives and Disability Champions in improving disability employment outcomes. Research shows that more than three-fifths of Equality Representatives have impacted positively on the employer’s disability equality practices,[6] and the majority of Disability Champions have impacted positively on employer willingness to conduct disability audits and amend and improve employer disability equality practice.[7]

However, the research also shows the impact of both Equality Representatives and Disability Champions increases where they spend at least five hours per week on their role. This is concerning given they do not have statutory rights to facility time to perform their role (as afforded to Unions Learning Representatives, for example). We therefore argue that such rights should be extended to Equality Representatives and Disability Champions. This would also help unions recruit into these roles in larger numbers. In the meantime, public services employers are in a position to provide best practice examples of the positive effects of working with these types of reps and providing them with the time off they need to perform their role.

7) How effective are government programmes which support or encourage employers to employ disabled people, particularly young disabled people? Does this differ by condition or disability? How could they be improved?

We offer insights on four government programmes: Disability Confident; disability employment reporting; pay gap reporting, and public sector procurement.

Disability Confident

Disability Confident has three levels – Level 1 (committed), Level 2 (employer), and Level 3 (leader). The accreditation criteria are based largely on whether employers have made commitments regarding their treatment of disabled people, and have adopted activities that may make a difference to them.

There are significant doubts regarding whether Disability Confident will improve disability equality outcomes. Research on Two Ticks (the predecessor to Disability Confident) shows that Two Ticks employers were no more likely to employ disabled people than non-Two Ticks employers, and were barely any more likely to adopt disability equality policies and practices. Two Ticks accreditation also did very little to improve disabled employees’ experience of work (regarding well-being, job satisfaction, fair treatment, and contentment) or close gaps between disabled and non-disabled people regarding these outcomes.[8]

It is unlikely Disability Confident will have performed any better. First, many Disability Confident employers were previously Two Ticks employers, having been transferred across from Two Ticks in 2016. It is unlikely these employers will have improved simply as a result of being migrated across to Disability Confident.

Second, Two Ticks accreditation was based on whether the employer had adopted various disability equality policies and practices, rather than achievement of certain disability employment outcomes (e.g. their workforce disability prevalence). Hence, there was no guarantee that outcomes would be any better in Two Ticks than non-Two Ticks workplaces. Given the Disability Confident assessment criteria are also policy/ practice-focused, there is equally no guarantee that disability equality outcomes will be any better in certified than in non-certified workplaces.

Third, as with Two Ticks, there is no independent assessment within Disability Confident to evaluate if employers are upholding the commitments expected of them, or if they are implementing activities effectively (there is external validation at Level 3, though employers select their own validators).

Thus, it is unlikely Disability Confident will have performed any better than Two Ticks. Therefore, we propose the following reforms:

i)                   Level 2 and 3 certification criteria should be amended to focus on workforce disability prevalence (i.e. minimum thresholds regarding the number of disabled people the organisation employs as a percentage of their workforce). At Level 2, this should be 7% (mirroring the “utilisation goal” in the United States’ 503 Federal Contractor Regulations towards which federal contractors are expected to work), and 10% for Level 3.[9] These figures are below the percentage of disabled people in the UK’s workforce, so are not over-burdensome.

ii)                Accredited employers who, over time, slip below the Level 2 and 3 thresholds should be moved down to the appropriate level (following a grace period in which they have the opportunity to improve).

iii)              Level 1 employers should be expected to move up to Level 2 or 3 and not remain at Level 1 indefinitely. Hence, Level 1 should be granted to employers for 3 years, and employers showing insufficient progress towards Level 2 or 3 certification after this time should have their certification removed.

These reforms have received widespread support, for example from the Disability Employment Charter (www.disabilityemploymentcharter.org), the Centre for Social Justice, [10]the Work and Pensions Committee[11], and the Institute of Directors.

Disability employment reporting – the government’s framework for Voluntary Reporting on Disability, Mental Health and Wellbeing

A further government scheme to encourage employers to support and employ disabled people is the framework for Voluntary Reporting on Disability, Mental Health and Wellbeing, introduced in November 2018. This encourages employers to measure and report the number of disabled people they employ as a percentage of their workforce.

In the framework’s introduction,[12] the government acknowledges that disability employment reporting has a number of benefits, helping employers: “Better monitor internal progress in building a more inclusive environment”; and “Access a wider pool of talent and skills through promoting inclusive and disability-friendly recruitment, retention and progression policies”. In short, disability workforce reporting places disability employment onto boardroom agendas, provides employers with the data to track the effectiveness of their disability inclusion efforts, and allows employers to benchmark their progress against regional, national and industry averages. It also allows government to identify high performers from whom important lessons might be learned.

However, the voluntary reporting framework suffers several problems[13]. First, it recommends that employers use the following question to ask employees about their disability status: “Do you consider yourself to have a disability or long term health condition (mental health and/or physical health)?”. This is not aligned to the Equality Act 2010 definition of disability or the Government Statistical Service’s harmonised disability measure. The recommended question may underestimate disability prevalence given its specific mention of disability, which may lead respondents with long-term activity-limiting health conditions to respond negatively as they do not identify as disabled.

Second, voluntary reporting framework question is ‘recommended’ rather than ‘required’. However, slight changes in question wording can produce markedly different results. Hence, if employers deviate from the recommended question, it will not be possible to compare data across employers with any certainty.

Third, the voluntary nature of the scheme means that its impact is likely to remain minimal, given only a fraction of employers are ever likely to use it (and many have not even heard of it).

Hence, we argue for the following reforms.

First, the government should replace the current voluntary scheme with mandatory disability employment reporting for all large employers (with 250+ employees). This would involve employers reporting to the government the number of disabled people they employ as a percentage of their workforce, and for the government to then publicise this data.

Second, when asking their employees about their disability status, all employers should be required to use a standardised question from which they should not be permitted to deviate. This question should mirror the Labour Force Survey (LFS) measure. This has already been piloted and validity tested by the ONS to ensure its appropriateness as a method to measure disability. It is also consistent with the definition of disability in the Equality Act 2010.

Third, employers should use a standardised data collection method. Different methods (e.g. via anonymous staff survey rather than via declaration to the organisation’s HR function) typically produce substantial variation in the reported figures. Thus, employers should be required to collect data on disability employment using a standardised approach. This might involve collecting data annually using a standard government form (mirroring the US approach under Section 503 of the Rehabilitation Act of 1973).

The above principles would ensure the system produces standardised, comparable data allowing employers to benchmark their progress against other employers and against meaningful national, regional and sectoral averages. It could also be used to establish whether employers have met our suggested revised criteria for Disability Confident accreditation, and in the assessment of social value within government contract procurement decisions (see below).

However, concerns are sometimes raised regarding the practical difficulties involved in implementing disability employment reporting. Nevertheless, several employers already report disability employment metrics, thus illustrating its operationalisability. These include EY, Clifford Chance and Capita. The BBC, ITV, Channel 4, Channel 5 and Sky, have all signed up to “‘Diamond”’, which is a system for tracking on- and off-screen diversity. In NHS England, the Workforce Disability Equality Standard (WDES) requires NHS employers to report ten specific measures that compare the workplace and career experiences of disabled and non-disabled employees.[14] Annual standardised workforce reporting by the civil service and government departments also identifies the proportion of their workforce who declare themselves disabled and this is reported by pay and grading levels.[15] Universities are statutorily required to report on workforce disability prevalence to the Higher Education Statistics Agency.[16] CIPD research suggests that over three quarters of organisations already have all or at least some of the infrastructure in place to facilitate mandatory reporting.[17]

Pay gap reporting

We argue that mandatory gender pay gap reporting, introduced in 2017, should be extended to disability for employers with 250+ employees. This would involve reporting: the mean and median disability pay gap in hourly pay and bonuses; the proportion of disabled and non-disabled employees receiving a bonus; and the proportion of disabled employees who fall into each pay quartile. Therefore, as well as identifying whether disabled people are paid on average less than non-disabled people, this would allow for the identification of whether they are distributed equally across the organisational hierarchy, or whether they cluster into lower level jobs and pay grades.

Mandatory pay gap reporting would be relatively straightforward for employers to implement if introduced in tandem with mandatory disability employment reporting (as outlined above). The first (and most complex step) for employers in calculating their disability pay gap is to ascertain which of their employees identify as disabled. Once they have this information, calculating their disability pay gap becomes a relatively straightforward administrative exercise. Information gathered on employees’ disability status for the purposes of mandatory employment reporting would therefore serve as the bedrock for disability pay gap reporting.

This would mean disability employment reporting (above) would need to be non-anonymous. It will therefore be incumbent on employers to offer assurances to employees that the data they provide on their disability status will be treated as confidential. This in itself may have positive effects, given disabled people would be more likely to view employers’ assurances of confidentiality as credible, and thus identify as disabled, where employers have developed more positive, supportive and high-trust relationships with them. It would be in the employer’s interest to develop such relationships given a failure to do so would risk disabled people not identifying as disabled, thus flagging the organisation as a poor employer of disabled people, which in turn would risk negative reputational effects.

One concern that has been raised regarding mandatory pay gap reporting is that it punishes employers who are taking positive steps to hire more disabled people[18] as they are likely to hire them initially into lower organisational levels. Hence, they may have larger pay gaps than employers not making such hiring efforts. This highlights the importance of employers providing a narrative to help explain and provide context to their pay gap figures.

It would also be possible to develop a hybrid metric that accounts for both the employer’s disability employment levels and their disability pay gap. This would involve dividing the disability pay gap by the percentage of employees who are disabled within the organisation, with lower scores representing more positive outcomes.[19] Therefore, an organisation with a 10% pay gap but a disability prevalence rate of just 5% would receive a combined score of 10/5= 2. However, an organisation with a larger disability pay gap of 20% but a disability prevalence rate of 15% would receive a (more favourable) score of 20/15 = 1.33. This hybrid metric would take employers’ disability employment prevalence into account in interpreting their disability pay gap data.[20]

Public sector procurement: the Social Value Act and PPN 06/20

Gross spending on public sector procurement was £379 billion in 2021/22 across the UK.[21] This this can be leveraged to improve disability employment outcomes.

In 2020, the government undertook a consultation on the reform of the Public Services (Social Value) Act 2012[22] leading to the reforms outlined in PPN06/20,[23] which came into force in January 2021.

PPN 06/20 stipulates the following:

i)                   Social value is to be explicitly evaluated in all central government procurement rather than just being “considered”.

The different forms of social value against which tendering firms can be evaluated (one of which is to reduce the disability employment gap) in the award of contracts.

ii)                A minimum weighting of 10% of the total score for the award of the contract is to be based on social value, to ensure that it carries a heavy enough weight in evaluating bids

iii)              To monitor the progress of the contractors in achieving the social value outcomes, key performance indicators (KPIs) are to be agreed between the contracting parties, and then recorded and monitored throughout the contract lifespan.

The specific mention of disability in PPN 06/20 is a positive step forward. However, there are several of ways in which PPN06/20 could go further[24]:

i)                   Contracting bodies should take disability employment outcomes into account in all contract award decisions. Currently, they must select social value objectives that are relevant and proportionate to the contract. Hence, disability may not be one of the social value objectives on which tendering employers are asked to compete. We argue it should be included for all contract award decisions.

ii)                The key disability metric used to inform contract award decisions should be the tendering employers’ workforce disability prevalence. Currently, employers are judged on whether they engage in activities that, for example, “demonstrate action to increase the representation of disabled people” or “support disabled people in developing new skills relevant to the contract, including through training schemes that result in recognised qualifications”. These are weaker criteria than comparing organisations on their workforce disability prevalence.

iii)              An aspirational target for workforce disability prevalence should be introduced towards which employers that win contracts should be required to work. This mirrors the 7% utilisation goal’ toward which federal contractors are required to work in the US under the Federal Contractor Regulations (s503 of the Rehabilitation Act, 1973).

iv)              PPN 06/20 specifies that social value KPIs should focus on the “contract workforce” (i.e. the section of the employer’s workforce involved in delivering the contract) rather than the “whole workforce”. Instead, it should be in relation to the employers’ workforce as a whole.

v)                PPN 06/20 does not outline the sanctions contractors should face should they fail to uphold their social value commitments. Where they fail to do so, this should count against them in future procurement exercises.

vi)              PPN 06/20 only applies to central government procurement, and not to all public sector contracts. It should be extended to cover the latter also.

October 2023