Tony Wilson, director of the Institute for Employment Studies (IES)

On 5 March, the @IEPInfo hosted its inaugural Summit, bringing together eighty people from across the employment and employability sector to reflect on where we were and the challenges for the future. 

The Covid-19 outbreak was already well underway by then, but with no European countries on lockdown and no (reported) deaths in the UK, virtually no-one – inside the room or outside it – was predicting the sheer scale of what was to come. Just three months on from that meeting, the recent past has never felt more like another country.

So where are we now, and what does this mean for the future?

Before this crisis began, and as we met in early March, the labour market was in decent shape. The employment rate was the highest that it had ever been (at above 76%); employment was up by 3.5 million over the decade, with 85% of this growth in higher skilled jobs; permanent work was the highest that it had ever been; and the gap in employment rates for disadvantaged groups was beginning to close. At the same time though, a decade of slow growth weak wages and cuts to social security meant that for many people and in many places, it did not feel like Britain was booming.  There was still work to do.

Fast forward three months however, and we are now in the foothills of an unemployment crisis that will likely be greater than any that we have faced. As at 9 April, there were 2.1 million people ‘claimant’ unemployed – up by 70% on the previous month, a faster rise than any point since 1947.  Since then there have been more than a million further claims for Universal Credit, and we know that there will be at least half a million people unemployed and not claiming benefit. By the time you read this unemployment will already be well above three million – and may be higher even than it reached in the Great Depression.

The government’s Job Retention Scheme (JRS) has prevented this crisis becoming a catastrophe – helping to protect the jobs and incomes of more than eight million workers and with a further two million self-employed workers receiving relief through a separate income support scheme, it’s likely that right now fewer than half of the working age population are actually working. The speed and scale of this crisis has been staggering and it will unfortunately get worse before it gets better – with the JRS due to start unwinding in August, bringing with it a risk of a ‘second wave’ of unemployment (we estimate, based on ONS survey data[1], that there are around 2.5 million furloughed workers in hospitality, retail and the arts who are likely to be particularly at risk); while long-term unemployment is going to start rising rapidly from the end of this year, bringing with it the risks of lasting damage to individuals, households and communities. 

Faced with a crisis of this magnitude, following on from what has been a devasting public health crisis, it is hard to know where to start but we can and we must respond. So with twelve other organisations and experts, we have co-authored proposals for what this needs to include[2]. First and foremost, in our view, this means ensuring that all of those who are out of work and who want work – including all of those unemployed – are guaranteed access to good quality, one-to-one help to prepare for and find work. The eleven thousand work coaches in Jobcentre Plus, most of whom are now back at their posts, will already be working hard to deliver this but we will need more – likely 8 to 10 thousand more – advisers and coaches in order to meet this challenge.  So we would like to see employment services, recruiters, local government and the voluntary and community sector mobilised to deliver this.

This support needs to be mobilised now and must be put in place in the less-than-two months that we now have before the JRS starts winding down. To manage any second wave that follows from the winding down of the JRS, we should require employers receiving the subsidy to notify employment services if they intend to make redundancies and to ensure that in all parts of the country we have the resources to co-ordinate and then deliver the employment, skills and welfare response. This response needs to be open to all of those who are out of work in that area, and not just those at risk of losing their jobs.

Alongside this, critically, we need to start to put in place the services that we will need in order to help those reaching long-term unemployment later in the year. This will take time to set up, and we know that any new programmes will not hit their stride until early 2021.  We cannot yet know what the jobs market will look like by then, but we can say with certainty that we will need to tip the scales in favour of those who are long-term unemployed and disadvantaged. We have a long and rich evidence base of what works in this space, including high quality employment services; personalised support; employer involvement; access to pre-employment training; support to address specific barriers like caring, basic skills, housing and health…  We can all design our fantasy programme from a list like this – but flexibility, agility, pragmatism and partnership will be key as we try to respond at speed and at scale. With nationally-procured employment services just one sixth of the size that they were going into the last recession[3], it is clear that no one part of government or one Department will be able to do this on their own.

Navigating our way out of this crisis and helping the millions of people who have lost jobs and income to find good quality and secure work, will define the work of employability services in the years to come. The role that IEP members will play in this response has never been more important.

Tony Wilson FIEP, Director, Institute for Employment Studies

Tony has worked in employment for most of the last twenty years in a range of roles across DWP, Jobcentre Plus and the Treasury, and more latterly in independent Institutes. As Institute Director at IES, Tony leads a team of forty people delivering research, analysis and consultancy support on employment, skills, education and HR.

REFERENCES

[1] “Furloughing of workers across UK businesses: 23 March 2020 to 5 April 2020”, ONS, 23 April 2020

[2] Help Wanted: Getting Britain Back to Work, May 2020

[3] Source: IES analysis of DWP Annual Reports and Accounts

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