Louise comments on the labour market statistics: Fastest ever rise in redundancies, on course for at least 600 thousand lay-offs by the end of the year
Commenting on the ONS’s latest unemployment figures,
Tony Wilson, IES Director, said:
“Redundancies are growing at their fastest ever rate, doubling in the last three months alone. This morning’s figures confirm that redundancies will peak higher in this recession than they did in the last crisis, and we’re still forecasting that there’ll be at least six hundred thousand lay-offs by the end of year.
“So unfortunately the worst may well still be ahead of us. Revisions to earlier estimates also show that the official measure of employment has fallen by nearly half a million since the pandemic began, which is the fastest fall in employment since 2009. This is now starting to feed through into higher unemployment, which again is going to continue to rise through the autumn.
“There are some signs of improvement however in today’s data, with the most recent flash estimate for payroll employees showing that employment started to level off through September. While this is positive, with the coronavirus infections now rising strongly again it feels unlikely that we’ll start to see much growth in employment and hiring in the coming months.”
Kirstie Donnelly MBE, CEO of leading skills organisation City & Guilds Group:
“It is deeply concerning that the number of employees on UK payroll has now declined by 673,000 since March and unemployment has surged to 4.5% between June and August. As it stands, the current sticking plaster solutions that are set to be introduced, including the job support scheme will simply not be enough to prevent these figures rocketing as we move into 2021.
“In order to address the tough challenges that lie ahead, we need to think differently about the skills and experience that newly unemployed people have and provide the support needed to help them to get back into work as soon as possible.
“With the UK job market undergoing some considerable systemic shifts and subject to wide regional variations, recognising and leveraging valuable transferable skills is only going to become more important. This is our act now moment if we are serious about avoiding a whole generation of people being permanently left behind.”
Rebecca McDonald, senior economist at the Joseph Rowntree Foundation, said:
“With redundancies increasing sharply even before the national furlough scheme is fully unwound, today’s figures are a stark reminder that this crisis still has a long way to run. This is not the time for half measures: the government can still act quickly and decisively to prevent a wave of unemployment that will hit the poorest hardest. And those who have already lost their jobs should be able to rely on a properly funded benefits system and given the opportunity to gain the skills they need to get back into work.
“Extending the existing furlough scheme in locked down areas was the right thing to do, but the new national Job Support Scheme will do little to protect the jobs of the lowest paid elsewhere. And while recent announcements on skills and training are a step in the right direction, the government must now deliver fully on the Right to Retrain and boost investment in basic skills and targeted employment support.
“The Chancellor has said that he cannot protect every job. We also know the economic impact of coronavirus will not be resolved by April. That is why it’s absolutely crucial that the £20 per week increase to Universal Credit is made permanent and the same lifeline is extended to those on legacy benefits.”
Neil Carberry, Chief Executive of the Recruitment and Employment Confederation said:
“This morning’s data is no surprise. The employment rate has been buoyant because of the furlough scheme and has started to drop as it ends and employers are forced to make redundancies where they cannot be avoided. The pick-up in unemployment and spike in redundancies emphasises again that tackling rising unemployment needs a team effort from Government and businesses designed to help people transition to growing areas of the labour market. The increasing number of vacancies emphasises that jobs are being created, in line with what our Jobs Recovery Tracker has been saying. The situation is already very different to the period covered by the ONS – we’re counted 1.2 million job ads across the UK right now.
“The data underpins the importance of getting the winter right economically. Making sure we support demand in the economy and people unable to work should be our priority. This means supporting temporary workers affected by local lockdowns and looking at how to support all the businesses in the affected supply chains that stand to lose out. Cutting employers National Insurance contributions could help boost hiring and keep people in work. It’s important we also focus on measures that will affect the economy in the long-term, securing a Brexit deal that guarantees smooth trading relations with the EU which is essential for our economic stability.”
Louise Deverell-Smith, founder of Daisy Chain, said:
“It’s no surprise to see the latest ONS figures continue to paint a negative picture of the UK’s labour market. News of businesses cutting jobs throughout the summer is finally materialising in the numbers, and they may get worse before they get better.
“But there is hope. As we move towards the end of the furlough scheme, now is the time for businesses and workers to show creativity and resilience. Changes toward more flexible working can create job opportunities and provide a silver lining around these dark clouds. Businesses can offer part-time roles through the Jobs Support Scheme, while workers can adapt to flexible working arrangements.
“The government has also announced a series of measures to support jobseekers. Both the lifetime skills guarantee and the JETS (Job Entry Targeted Support) scheme should help retrain and reskill the workforce in roles which are viable within a new economy. Combined with a greater focus on flexible and part-time working opportunities the UK economy and jobs market will recover.”
“Today’s ONS figures, combined with the introduction of further local lockdowns, suggest that the Bank of England’s forecasted unemployment rate of 7.5% by 31st October is still a real possibility as we edge towards the end of the furlough scheme
“The Government has recognised and sought to address this looming job crisis, with the launch of the Jobs Support Scheme (JSS) to promote part-time employment and the Job Entry Targeted Support Scheme (JETS) being the most recent examples. The JSS’s offer to pay 67% of workers’ wages at firms shut due to COVID-19, is a vital line of support to businesses as the UK grapples with the new three-tiered lockdown system and a winter of stop-start regional lockdowns. But the scheme will need to be improved before its launch in November if is to provide more flexibility and be more generous to those most in need.
“The £238m JETS scheme will help jobseekers who’ve been out of work for at three months or more, with CV assistance, interview coaching, and, importantly, advice on how to reskill into growing sectors. Reskilling will be vital to the UK’s economic recovery from COVID-19, because, despite the doom and gloom in the news, new job opportunities are starting to emerge. Over 160,000 new jobs were added onto reed.co.uk last month – a 28% month-on-month increase – with roles significantly increasing in the accountancy, education, and health and medicine sectors. Reskilling will open the door to opportunities for jobseekers in growing sectors and prevent a more widespread unemployment crisis from gripping the country.
“At the start of the pandemic, I predicted that a tsunami of job losses was heading our way but, with a renewed focus on reskilling and redeploying workers to thriving sectors, this wave of unemployment will subside soon.”
Rishi Sunak, Chancellor of the Exchequer, said:
“I’ve been honest with people from the start that we would unfortunately not be able to save every job. But these aren’t just statistics, they are people’s lives. That’s why trying to protect as many jobs as possible and to helping those who lose their job back into employment, is my absolute priority.
“This is why we put together an unprecedented £190bn package of support and have a comprehensive Plan for Jobs. Our measures have focused on protecting people’s livelihoods, which is what the furlough scheme has done and what our support schemes – including SEISS, the Job Support Scheme and Job Retention Bonus – continue to do.
“For those who do lose their job, there will be new opportunities through apprenticeships, traineeships and our £2bn Kickstart scheme, and extra work search support which will help to ensure nobody is left without hope.”
A Government spokesperson said:
“Whilst measuring the economy is a matter for the ONS, our labour market interventions have been based on a whole range of data from various sources such as the HMRC real time data as well assessment of the impact of coronavirus restrictions.
“We remain committed to protecting, supporting and creating jobs through our £3bn Plan for Jobs, including the £2bn Kickstart scheme helping young people onto the career ladder, offering training through traineeships and apprenticeships and targeted support through the JETS programme for those who have lost their jobs in the pandemic.
“Flash HMRC PAYE Real Time Information data for September shows the number of paid employees rose 0.1% on the month, an increase of 20,000 employees.”
The Open University (OU), the Department of Work and Pensions (DWP) and Jobcentre Plus (JCP) are rolling out an initiative to tackle the common skills gaps among jobseekers following a successful pilot programme.
The programme gives jobseekers and claimants access to a specially designed hub of free skills-based courses on the OU’s OpenLearn platform, enabling them to gain recognition of their existing skillsets and to build new skills to increase their employment opportunities. Courses cover a range of areas such as leadership, networking and career resilience.
Minister for Employment, Mims Davies MP said:
“Many people will find themselves out of work and on the job hunt for the first time, perhaps unexpectedly, in need of vital support to build confidence, skills and new qualifications, and be ready to swiftly move back into employment – so it’s excellent to see these free online courses from The Open University become widely available at this time.
“Opportunity is at the heart of our Plan for Jobs as we push to build back better by doubling the number of Work Coaches across our Jobcentres, providing hundreds of thousands of Kickstart placements for young people while launching our new Job Entry Targeted Support to help those made jobless by the virus back into work.”
Simon Tindall, Head of New Business at The Open University said:
“The COVID crisis continues to cause massive disruption and displacement. Figures show that 25% of businesses have made redundancies in response to the pandemic and unemployment levels are expected to continue to rise. As a result, there are now over five million people claiming universal credit in some form.
“Supporting people back into work, especially those from more disadvantaged groups, is needed now more than ever and this is a fantastic opportunity for the OU to fulfil its social mission and provide free education and training to those people most in need.”
Cameron King, Employer Adviser, Department for Work and Pensions, said:
“The OpenLearn programme has proved very successful with customers and partners and it is exciting to be able to offer a range and breadth of free courses to support our jobseekers at whatever stage of their learning journey and whatever stage of their employability.
“The insight shared from The Open University has been invaluable in helping us to better understand the needs of industry in terms of skills and continuous learning and has also informed the nature and scope of how we offer some of our digital learning opportunities to jobseekers.”