The government has taken a sector- and skills-specific approach to tackling unemployment across the UK. This is instead of forming their response to specifically meet challenges as they are presented at a local level. So, how have these schemes for tackling unemployment performed locally? Have local authorities and businesses been provided with the tools they need to successfully kick-start local economies? And what should their next steps be?
The pandemic has not impacted all areas of the UK equally. Factors including the predominant industries present in a region, historic differences between regions, and the rural/urban divide have resulted in some places starting to recover much quicker than others.
For example, towns that surround major airports have been badly hit by the pandemic. The livelihood of many of their residents relies on a thriving travel industry. Air travel has been one of the slowest industries to recover, and McKinsey has predicted that airlines won’t return to 2019 levels until at least 2024. What’s more, the pandemic has changed customer behaviour. For various reasons, including heightened awareness of sustainability issues, it’s possible that flight frequency won’t ever return to pre-pandemic levels. Airport towns like Slough, Luton and Crawley are struggling because a high proportion of residents were supported by the furlough scheme. Scenarios like this, which are playing out all over the UK, imply that a tailored, local approach to designing and delivering employment schemes would be beneficial.
Other gaps in health, skills, and productivity, all impact how places in the UK are able to recover. They also influence the measures needed to support a return to economic health. As the OECD report says: “Large cities, tourist destinations, intensive energy-producing regions and places more connected to trade will be among the most affected in the short term. Experiences with previous recessions and other shocks suggest that – maybe with the exception of the largest cities – the most affected local economies will not be able to bounce back quickly. Local labour markets could suffer for years to come, exacerbating regional disparities in unemployment, economic inactivity and job quality.”
The government’s approach to economic recovery
Chancellor Rishi Sunak’s Plan For Jobs, announced in July 2020 and since extended, proposed a comprehensive approach to tackling the fallout from coronavirus. The plan boosted and revised existing employment mechanisms like apprenticeships and traineeships, as well as introducing new schemes. The aim of the three-point plan was to help people to find jobs, to create and to protect jobs.
As furlough came to an end, Sunak announced a Job Retention Bonus. This would reward companies for bringing furloughed employees back into full employment. “Our message to business is clear: if you stand by your workers, we will stand by you,” Sunak declared. Alongside this, the Kickstart scheme pays employers to create new jobs for 16- to 24-year-olds. Young people have been some of the most impacted by Covid-19. And the Restart scheme gives people on Universal Credit who are long term unemployed (unemployed for over 12 months) enhanced support to find a job in their local area.
Additional funding has been aimed at apprenticeships, and these have been extended to support over-25s. The levelling-up agenda aims to tackle the poor infrastructure hampering local economies around the UK. Finally, the government’s Ten Point Plan for a Green Industrial Revolution is intended to support job creation. It’s a broad scheme with a local impact. The plan will have the greatest effect in areas home to manufacturing companies interested in green technologies. For example, Siemens is investing in its site near Hull and GE Renewables in a plant in Teesside. Nissan is set to create a new manufacturing hub in the North East.
Broadly speaking, this is a one-size-fits-all approach geared towards solving sector-specific and skills challenges. There are no specific solutions for locally identified gaps and requirements. However, local authorities do have a role to play in identifying and advising the government of the gaps present in their localities. They also manage levelling-up budgets and work with local employers and services to administer the kickstart and restart schemes.
Kickstart, for example, is delivered through local ‘gateway’ providers, who identify and match employers with hopeful employees. Sector Based Work Academies – where the government aimed to triple the number of places available – require local businesses to partner with local Jobcentres and further education colleges to deliver skills training, fill vacancies and address local unemployment. As the OECD points out: “They [local authorities] can build bridges between employment, skills and economic development policies.”
This largely one-size-fits-all approach appears to have been successful.
Kickstart started slowly, with delays apparently caused by complex paperwork and the requirement to go through local ‘gateways’ to access funding. The reason for this approach, interestingly, was not to ensure adjustments can be made to suit local needs. Instead, it ensured funding was correctly applied (only) to eligible young people. A DWP spokesperson explained: “Referrals must be made through work coaches to ensure that eligible young people are applying for these jobs. Kickstart Scheme grant funding is only given when a young person is recruited through this route.” Nevertheless, the requirement to collaborate with local Jobcentres may be the reason that local newspapers are filled with success stories from the scheme.
For example, in the West Midlands town of Walsall, the Kickstart programme has so far enabled seven young people to start work at Walsall FC, the local football club. They’ve taken up a variety of roles, from coaching and grounds maintenance to media, and the club is hoping to hire another 20 recruits following their initial success. The process has been facilitated by the English Football League Trust, which is acting as a gateway for over 65 clubs. Adam Davy, Community Director of Walsall FC, commented: “Our first cohort of seven Kickstart participants have proved to be a real asset. The potential for growth is a very exciting prospect for both the young people and the Club as a whole.”
Similarly, in North Yorkshire where the local council has acted as a gateway organisation, over 100 employers are offering jobs through the Kickstart scheme in industries where there might not otherwise have been opportunities for young people. And the story is similar in South Wales. Carmarthenshire County Council is the gateway for over 70 local employers to access the Kickstart scheme.
Local employers Morganstone commented: “The future of construction lies with the generations to come but skills shortages have been a worry in the industry for many years. At Morganstone we’ve always had a passion for promoting the industry to young people and providing them with the skills and opportunities to succeed – they have so much to offer and due to the current climate many have been unable to realise their full potential. That’s why as a company we were so keen to be involved in the Kickstart scheme. Our Kickstart experience has been a great success already; it has allowed us to welcome great young talent into the organisation.”
It is not just Kickstart that has seen local success. Sector Based Work Academy programmes (SWAPs), described as ‘mini traineeships for adults’, last up to six weeks and involve pre-employment training, a guaranteed job interview and a work placement. All costs associated with SWAPs are covered by the DWP, which is one reason they hold a strong appeal for employers.
In one example, East Sussex College has collaborated with Southern Railway and Gatwick Express to prepare 12 learners with the skills needed to fulfil posts in their businesses. The railway operators’ Managing Director Angie Doll commended the scheme and remarked: “We are continuously looking at ways to attract and retain a diverse workforce that is truly representative of the communities we serve.” So these schemes can also serve to enable a more equitable economic recovery, ensuring diverse people with diverse skills and needs can access employment.
And jobseekers are also enthusiastic about SWAPs. One government case study explains how Paul King from Kingston upon Hull found a new role in telesales through a SWAP, a role he wouldn’t have considered previously. Paul said: “Prior to the SWAP, I wouldn’t have seen myself in telesales, but it really opened my eyes to the industry and the range of roles within it. After gaining that first-hand experience and the opportunity to meet people already working in the sector, I was sold!”
These widely reported success stories are encouraging. But, they are largely taken from government issued press releases and government-arranged press opportunities. It remains to be seen whether these promising examples will be representative. We will continue to monitor how the schemes tackling unemployment impact local communities and economies around the UK.
Local Enterprise Authorities
The apparent success of these schemes in tackling unemployment is largely down to the collaboration that has taken place between local authorities, local employment services and local employers. Given this, it will be interesting to see in which direction the government takes Local Enterprise Partnerships (LEPs). The initial role of LEPs was to facilitate productive collaboration between the public and private sectors to boost economic growth. Having existed for over a decade, LEPs were reviewed in 2018 and are again under government review.
The role, function and structure of LEPs are being reconsidered by the Cities and Local Growth Unit to make sure that “the organisations are positioned to ‘support productivity and growth’.” Mark Bretton, chair of the LEP Network, remarked that “a lot of councils have come asking for help from LEPs” during the pandemic. The aim of the review is to build on that experience. According to a Ministry of Housing, Communities and Local Government spokesperson, they want to “ensure local businesses have clear representation and support in their area, to drive the recovery”. Again, the need for a local approach has been recognised.
The economy at large
However, there are more pressing issues facing the economy right now, and these need to be solved at a government rather than local level. Namely, the exodus of workers that has taken place since Brexit and throughout the pandemic. This is being felt across all sectors, from hospitality to construction. According to The Guardian, 38% of businesses say that a lack of regional talent is hurting their ability to recruit much-needed staff.
A spokesperson from the British Meat Producers Association, another industry severely affected by the ‘exodus’, explained: “Industries are now competing with each other for a dwindling pool of workers, and the current labour crisis has seen workers in strategically important sectors like food manufacture and social care being enticed away by other sectors that can afford to hike wages by 20% or 30%.”
So far, the government has issued a limited number of short-term visas to lorry drivers and poultry workers to alleviate some of the issues expected to arise in the run-up to Christmas. However, according to the Confederation of British Industry, these labour shortages could last up to two years while businesses train enough staff to fill the gaps left by European workers. It’s clear that further action is required to address this challenge beyond the immediate needs of the holiday season.
While the shortage of workers is being felt across industry, there is no shortage of unemployed people trying to find work. The Institute for Fiscal Studies (IFS) has reported that the recent surge in job openings has been driven by low-paying occupations in areas such as transport and storage, cleaning, caring and hospitality, whereas higher-paid jobs have been slower to recover. Economist at the IFs and author of the report, Xiaowei Xu, has said that for people in many lines of work, job opportunities are still far more restricted than before the pandemic, and competition for available jobs is fiercer.
What should be done next?
Several key institutions have made recommendations for schemes that could help to combat the issues still being faced by local economies in the UK.
The TUC is advocating for a permanent, furlough-like, short-term job support scheme. In August it set out its reasons for promoting this approach, which include evidence of the success of furlough, the presence of similar schemes in most other OECD countries, and the likelihood that our economy will continue to experience major disruptions, whether from further pandemics, the climate crisis or global financial instability.
Meanwhile, a National Infrastructure Commission report published in September calls for greater devolution. The commission believes this would provide local councils with greater certainty and control, enabling them to better make long-term plans. Commissioner Bridget Rosewell commented: “Competing against other councils for multiple pots of cash creates a focus on the short term, continual uncertainty, and burns up staff time. Local councils need to be empowered to deliver transformational plans for the future and held accountable for doing so.”
Finally, in October the Lifelong Education Commission and ResPublica published their first report outlining their recommendations to reform the UK’s skills system. To fix what they see as a fragmented system, the commission has suggested a place-based approach to adult learning: “To deliver on the lifelong skills agenda, it is imperative that government provides appropriate governance structures that can incentivise institutions to develop local markets for learning which can effectively balance all parts of the local education system.”
Each of these suggestions emphasises a local approach. Given the successes that have been experienced when local authorities and local businesses have collaborated (albeit in an atmosphere of broad-sweeping approaches to rebuilding the UK economy), this appears to be the most appropriate route to ensuring continued improvement in tackling unemployment.