Long-term unemployment could hit 1.6 million in 2021-22 – a 600% increase and the highest since 1994. These are our estimates, based on Office for Budget Responsibility (OBR) scenarios for total unemployment.
People become long-term unemployed when they have been out of work for 12 months and it scars individuals, families, and communities for years to come. It lessens the chances of finding work and significantly reduces income in future years. It demotivates people, undermines their skills, and can lead to health problems, especially mental health.
Based on the three OBR scenarios (upside, central and downside) we estimate that long-term unemployment will be between 1 million and 1.55 million in 2021-22. By 2025-26 it will still be between 0.48 million and 0.72 million.
If there is a slower recovery than anticipated by OBR in July, then we estimate that long-term unemployment could remain over 1 million for up to four years.
290,000 young people could become long-term unemployed, despite the measures announced in the Chancellors ‘Plan for Jobs’. More than 1 million people aged 25+ could be long-term unemployed next year, the highest on records since 1992.
The scale of the challenge is huge. The number of people becoming long-term unemployed in April and May 2021 could be up to three times higher than peak monthly referrals to the Work Programme introduced after the last recession.
Planning to deliver support to the long-term unemployed at the right time and to the right scale is now critical. We estimate that up to £4 billion will be needed next year to provide the services to get people back into work, 25% more than DWP spent on employment programmes in its peak of 2010-11.
We think there should be a universal offer to all long-term unemployed people across the UK. The UK Government should broker speedy discussions with the devolved administrations, English local government, and other stakeholders.
The universal offer should be delivered by the devolved administrations and in partnership with local areas in England. This will make sure services are delivered in a way which makes sense for local conditions and local employers. We need to galvanise national and local partners to work together to gear up for a launch of new and extended support in Spring 2021.
Eight design principles:
- A clear offer, easily delivered: time and need are pressing which is why clarity is needed on what support should be on offer, and which can easily be put in place with the minimum of delay. This is achievable with the right approach to working together.
- A combined effort between national and local: No single organisation will have the capacity to deliver all that will be needed to the numbers of people involved. A collaborative approach is needed – bringing together the expertise and capacity of national government, local government and private and voluntary sectors.
- Personalise: there will be a wide range of circumstances and characteristics in the coronavirus long-term unemployed generation. Every individual is different and we need a service which can build on people’s strengths and hopes. A strong trusting relationship with an advisor should be at the core of the service.
- Choice: we need support where there is a choice of pathways for individuals – flexible, responsive and personalised.
- Contributing to recovery: retraining will remain important for the long-term unemployed, as will job creation projects. Funds spent on the long-term unemployed should be seen as an investment towards economic recovery.
- Coronavirus proofed: there will many challenges to the traditional way of delivering which we will need to rethink. Provision must be covid-secure and respond to different local measures, and this includes how we support those most at risk from the virus.
- Flexibility and adaptability: there are many uncertainties ahead. This should mean that we don’t tie ourselves into inflexible long-term arrangements. We need nimble and agile arrangements that can easily be scaled up or down.
- Prevention and sustainment: design needs to consider the support people have already had before becoming long-term unemployed. There also needs to be new approaches to sustaining employment for those who get a job, and a new start for those who are still unemployed after two years.
Chosen excerpts by Job Market Monitor. Read the whole story @ Time to act – Tackling the looming rise in long-term unemployment – Learning and Work Institute