The Chancellor was right to declare an “economic emergency” at the House of Commons dispatch box yesterday. If he believes this is an emergency driven by an escalating employment crisis, it is one which can be remedied through Government-created jobs and much more ambitious skills provision.
What is the current outlook for jobs? The latest official statistics show unemployment at 4.8%, a percentage point up from a year ago and still far from its expected peak of 7.5% next year. That is a bleak prospect: 2.6 million workers out of a job and joblessness at its highest level since the 2009 crisis.
The Chancellor’s main counterpunch came early in Wednesday’s Spending Review: the Restart programme, a £2.9bn scheme run out of the DWP to help one million long-term unemployed workers find jobs. £400 million will become available in 2021/22 with the remaining cash spent over the following two years. It is a significant intervention with a hefty price tag. Restart has been warmly received and the Government can be encouraged by the DWP’s evaluation of the long-running Work Programme, released earlier this week.
That said, return-to-work initiatives have a chequered history. Knitting together local employment services, employers and skills providers is a tough challenge, and an adjoining problem exists in delivering quality support and advice for those living with disabilities and health conditions.
Restart will help some long-term unemployed back into work. But people can only apply to jobs that exist, and the private sector is unlikely to create enough of those and certainly not at the speed required. A smattering of new jobs from the Prime Minister’s 10 point climate plan and lofty infrastructure promises won’t cut it. Those jobs will be high skilled and take a while to emerge, whilst current losses are more commonly felt in lower skilled sectors like hospitality and retail.
Intervening more decisively could mean adopting a Universal Jobs Guarantee, as the Social Market Foundation and many others have called for. That means a decent-paying, state-provided job for anyone who wants it. For a Government which borrowed liberally from the rhetoric of FDR’s New Deal, it would do well to consider one of its core components.
Even if that idea is too radical or costly for the Treasury, it cannot ignore the Prime Minister’s pledge from two months ago that his Government will “help you get the skills you need”. Funding announcements can be bewildering and skills and training policies far less exciting than cuts to foreign aid. But, frankly, investment in reviving Britain’s failing adult education system will have a far greater bearing on the country’s ability to quit the jobs crisis than almost anything else.
And on skills and training the Chancellor failed to come up with the goods. Funding for Further Education will be maintained at pre-existing levels. The only significant announcement for adult education was the £375 million released from the National Skills Fund to kick off the Lifetime Skills Guarantee next year. That money needs to be viewed in the context of the £1.3bn drop in annual adult education funding and a 50% decline in those participating adult education, as the Social Market Foundation set out in a report earlier this month.
A sufficiently ambitious white paper on further education, long awaited, could change all of this. But given that spending is now locked in for the next year, it seems unlikely that skills and training provision will undergo significant reform prior to 2022, at which point Britain will be deep into the unemployment crisis. Given the scale of the challenge we face, we cannot afford to wait that long.