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Act now to tackle record rise in unemployment and prevent long-term damage

19 May 2020

Employment experts call for £1bn Youth Guarantee and urgent investment in education and back-to-work support The Government needs to act now to tackle the fastest spike in unemployment on record or risk permanent damage to our economy and people’s livelihoods, a group of experts say today. The call comes ahead of new labour market data which are expected to show the first official signs of the rise in unemployment resulting from the coronavirus crisis. During March and April 2.5 million people made a new claim for Universal Credit, and the Office for National Statistics is expected to confirm today that claimant unemployment has increased to its highest since the mid 1990s. Based on this, independent researchers believe five years of jobs growth has been wiped out in one month, while the number of vacancies available for those out-of-work has slumped to its lowest since the mid-1990s. The report warns that young people, women and the lowest paid have been hardest hit by the downturn. Failure to take urgent action risks further entrenching the geographical inequalities the Prime Minister pledged to narrow and creating a ‘pandemic generation’ of young people with poorer education and employment prospects. The longer someone is out of work, the more long-term damage is done to their career prospects and the economy. To tackle this, a group of experts has come together, made up of former government advisors, labour market experts, research institutes, think tanks and organisations representing those delivering education, training and support to unemployed people. The group today calls for: Targeted tapering of emergency support. Providing support to find new work for furloughed workers who lose their jobs as the Coronavirus Job Retention Scheme is withdrawn between August and October. Investing up to £800 million to scale up back-to-work support for the newly unemployed. This would mobilise Jobcentre Plus work coaches, the recruitment industry and local and voluntary sector employment and training services to get people back to work quickly. Ensure the long-term unemployed and disadvantaged are not left behind. Invest up to £2.4 billion in personalised support alongside access to training, volunteering and other specialist help. Even before this crisis began, 3.2 million people were out of work who wanted to work. National and local government must work with employers and civic society to address this. Education and employment promise for young people. Everyone leaving education this year should be guaranteed support to find work or a place in education or training. That should include intensive employment support for all unemployed young people, underpinned by a £1 billion Jobs Guarantee for those out-of-work for the longest. Building for the future. We should plan now for how to level up access to well paid, high quality work based on understanding the future of the labour market, and ensure world class employment and skills services for all young people and adults. The Government acted swiftly and decisively to protect jobs and businesses, including through the Coronavirus Job Retention Scheme, but now must act to help those losing their jobs back to work. Stephen Evans, chief executive of Learning and Work Institute, said; “Our research shows five years of employment growth was wiped out in one month. The Government’s actions have prevented things being worse. But we need to act now to prevent permanent damage to our economy: investing in young people; mobilising back-to-work support; and making sure we help those left behind before the crisis.” Tony Wilson, director of the Institute for Employment Studies, said: “Unemployment has risen faster in the last two months that at any point in our lifetimes. So having averted a disaster through the Job Retention Scheme, we need the same urgency to support the millions now out of work or facing unemployment. The good news is that this will cost a fraction of what we have spent so far in protecting jobs. All of us who have contributed to this report are ready to work with the government to make this happen.” David Hughes, chief executive of the Association of Colleges, said: “Urgent action is needed to support young people leaving education this summer as they face unprecedented challenges in finding jobs and to help those being made redundant. Colleges will be central to the training, skills and education offer that will help people improve their skills and job prospects. They will also work with employers to help them get the skilled people they need to stay in business.” Charlotte Pickles, director of Reform, said: “Claims for Universal Credit have already increased seven-fold. As the coronavirus measures continue, the number of people unemployed will only rise. The Government must act now to provide upskilling and employment support; delaying risks exacerbating inequalities and scarring a generation of young people. The Chancellor’s fiscal response to the immediate economic crisis has been impressive, he must not undermine that by failing to plan for the rebuild.” Elizabeth Taylor, chief executive of ERSA, said: “Employment Support organisations have a 38 year track record of working collaboratively to get young people into work, working with employers, keeping young people close to the labour market, upskilling and providing hope. There is a distinct lack of current provisions, the sector is ready, but funding and resources must be allocated now.” Dan Corry, Head of the Number 10 Policy Unit and senior advisor to the Prime Minister on the economy (2007-10), said: "This crisis is of course very different from that of 2008-2010 but that period showed us that if government acts fast and intelligently it can make a major difference to the employment prospects of thousand of young, old and vulnerable people. This report points the way forward." Andrew Ratcliffe, CEO of social mobility charity Impetus, said: “If we don’t act now the COVID health crisis will lead to a youth jobs crisis bigger and faster than anything we’ve seen for a generation. And it will have effects that last a lifetime: being out of work when you’re young means you will earn less and work less over your whole career. Government needs to work with businesses, the voluntary sector and others to support and invest in young people to keep them earning and learning through the crisis and beyond.” You can read the full report here.