Introduction

A defining characteristic of deprived neighbourhoods is the relatively high levels of unemployment and worklessness experienced by their resident populations. This has fundamental implications as involuntary exclusion from the labour market is the principal cause of social exclusion in a society where paid work is the main source of income, social status and identity, and social interaction outside the family (Gordon and Turok, 2005, p 254). It follows therefore that the regeneration and renewal of deprived neighbourhoods is closely linked to increasing the proportion of the working-age population who are in work and, in so doing, overcoming the various barriers that stand in the way of them entering the labour market. It has certainly been the view of successive New Labour governments that getting more people living in deprived neighbourhoods into work is one of the best ways of overcoming multiple deprivation, with labour market inclusion being one of the principal ways of achieving social inclusion (McQuaid and Lindsay, 2005, p 204). To quote from New Labour's manifesto at the time of the 2001 General Election, ‘work is the best anti-poverty, anti-crime and pro-family policy yet invented’ (‘Ambitions for Britain’, Labour Party Manifesto 2001, p 24).

Despite the government's claim that there are now record numbers of people within the UK in employment, exclusion from the labour market remains a major problem within society, albeit perhaps less obvious than in the early 1980s when the unemployment rate exceeded three million people. One of the striking trends of the last decade has been the increase in the numbers of people of working age who are classified as being economically inactive and not actively seeking employment at a time when the numbers of registered unemployed have been falling. Thus, whereas there were half a million fewer people of working age in the UK who were unemployed in 2005 than in 1997 (down from 1.9 million to 1.4 million), the number who were economically inactive increased by more than a quarter of a million (from 7.6 million to 7.9 million), indicating a move of unemployed people into other statuses, such as sickness, Incapacity Benefit (IB), and early retirement (Webster, 2000).