As a result of the Covid-19 outbreak, there is a looming unemployment crisis. More precisely, the impact of the pandemic on the economy and on the labour market has meant that a surge in unemployment is coming, and the imminent withdrawal of targeted government support, like the Job Retention Scheme, will only exacerbate the issue.
There will be thousands of young people coming onto a treacherous labour market in September, as well as a large number of older people who we know will also suffer in this downturn in the labour market. The social sector has to play a part in getting people through this and we know that many charities and funders are eager to understand how they can help with whatever is being planned by government.
So, on 20 August, NPC held an important briefing on what the big issues are, what charities are concerned about and what charities are thinking of doing. We organised this event with ERSA, the Employment Related Services Association, a membership body for those who deliver employment services, many of which are charities. We want to thank their Chief Executive, Elizabeth Taylor, for her help with the event.
Urgent action required
What’s key is that we do know what needs to be done. Unlike on many other difficult social issues, this is a well evidenced area and we are rightly impatient to get on with it. Elizabeth and I are two of the authors of the Learning and Work Institute’s paper Help Wanted: Getting Britain back to work, published in May, which covers a lot of this.
In July, the government published ‘A Plan for Jobs 2020’, you can find it here. This policy paper includes the government’s proposals for combatting unemployment and Elizabeth talked us through a number of these proposal at our briefing.
The government has committed to introducing the Kickstart Scheme, a £2bn fund to create hundreds of thousands of six month work placements for those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. The government will expand and increase the intensive support offered by the Department for Work and Pensions to young jobseekers and will provide an additional £17m to triple the number of sector-based work academy placements in England, which provide vocational training and guaranteed interviews for people. They will also hire more work coaches and establish a new job finding service.
But as Stephen Evans, Chief Executive of the Learning and Work Institute, recently said in a thread on Twitter: ‘five months after lockdown, how do we still not have a youth guarantee of a job, training offer or apprenticeship? … On Kickstart, it’s a great initiative & something we called for. But when will it start? Where are the details? How does it link with other support? How will DWP [the Department for Work and Pensions] work with local gov & others to make sure enough placements are created?’
In the end, Stephen lamented, ‘it feels like a too little, too late, too disjointed response in England. The risk is a postcode lottery that harms those that need help most, with a huge spike in NEET numbers [young people not in education, employment or training].’
But as Stephen also added, ‘it’s still not quite too late to do better. Urgent & ambitious action is needed.’ We agree.
Tailored support for the unemployed
At our briefing, Professor Paul Gregg, one of Britain’s leading experts in labour markets and someone intimately involved with designing many employment schemes in the past, took us through many of the issues that we are facing. He was less optimistic than the Bank of England in terms of unemployment projections, as he felt there was little reason to think that the fall in employment in this recession would be much less than the fall in GDP (as was the case in the recession after the 2008 financial crash).
As Paul pointed out, at the moment, government policy is mostly focussed on trying to keep people connected to their jobs, but in the not too distant future the issue will be finding jobs for the many—especially young people—who are without one, either never having had one or having lost one.
For young people at the beginning of their job journey, work experience will be crucial. For many others, that will be less important than the forms of support focussed on retraining and coaching. As Paul said, finding people jobs will be much easier if the macroeconomic situation is improving—which may be the case.
This recession will be quite different from many other ones, in that we will have a very fast increase in unemployment but then, with luck, it will begin to fall quite soon. But Paul’s guesstimate that around 24% of 18-24 year olds will not be in education, employment or training at the peak of this economic downturn should make people sit up.
What role can charities play?
At our briefing, we heard from four charity sector leaders, Richard Rigby, Head of Policy and Public Affairs at the Prince’s Trust; Clare Richards, Chief Executive of the Clement James Centre; Matthew Forsyth, Head of Operations and Contracts at Sport 4 Life UK; and Graham Parry, Director of Youth, Employment and Skills at Groundwork UK—as well as from those who left comments in the Zoom chat. Below are some of the points that emerged from our conversations.
When discussing the part charities can play in combatting rising unemployment, there was strong support for the Kickstart Scheme. This scheme seems to be based on the Future Jobs Fund of 2009-2010, which evaluation shows worked well for the unemployed in terms of sustained job outcomes and this scheme fully involved the charity sector. But there was a debate over whether a ‘payment by results’ model or grants for charities would be the best way to enable their involvement in the wider issue of getting people into work.
There was a recognition that unfortunately the ‘usual’ groups are likely to be the hardest hit and will therefore be most in need of support from charities—disabled people, those from BAME communities.
There was also a strong feeling that older people faced challenges which weren’t being fully acknowledged. It was argued that for many of these people, re-employment would likely involve a total change of career and they in fact would need quite a lot of coaching and training, which panellists seemed to suggest would be concentrated on young people.
And our discussions also raised concerns about access. There is a worry that the Department for Work and Pensions’ rules and funding streams may not allow enough place-based working. Charities know that in order to help those seeking work, they need to be able to connect with local councils and employers. What’s more, employment entry points which charities are used to getting people into, such as the leisure and retail sectors, have been adversely affected by the pandemic. Questions remain about whether charities have built up good enough connections with other parts of the economy.
Tackling the coming surge in unemployment is—and should be—a key issue for the charity sector, both for those who specialise in helping people into work and to retain jobs, and for those who may be able to provide jobs. Further urgent action is required from government and we hope that charities will be able to step up and play their part by providing tailored support for those out of work as a result of Covid-19.
If this blog has whetted your appetite, you can watch the whole event on our You Tube channel. You can also see how this crisis is affecting employment in the charity sector, by taking a look at our Covid-19 charity redundancies monitor.