The government’s Plan for Jobs: a comprehensive response to the crisis, but challenges remain

Blog posts

8 Jul 2020

Tony Wilson, Institute Director

Follow @tonywilsonies

The government’s plan for jobs today is welcome, comprehensive and recognises the scale of the employment crisis that we are now facing.  It’s clear that the government has listened to and learned from the evidence of what has worked before and what needs to happen now.  The sad reality is that even with these announcements, we will almost certainly see unemployment rising above three million in the coming year, to levels that we have not seen since the 1980s.  However with today’s measures there is a good chance that we can avoid it reaching the four or five million that many of us had feared.

The top two priorities today had to be to try to minimise job losses as the furlough scheme unwinds, and alongside this to put in place the right support for those out of work to find new jobs.  On the first of these, the announcement of a new £1,000 retention bonus for keeping on furloughed staff should make a real difference for many firms in industries that have been hit hard by the crisis, and will be particularly well targeted at supporting lower paid workers at risk of job loss.

On support for the unemployed, the detail of today’s speech reads like a how-to kit for dealing with a big recession –  a doubling in employment service staffing, investment in redundancy response, expansion of careers advice, more money for re-training including hiring incentives, a new programme for the long-term unemployed, and a jobs guarantee for young people.  This might be old wine in new bottles, but it’s good wine and the better for it – doing things that have been tried, tested and will work.

However a number of big challenges will remain.

First, we are now three months into the crisis and cannot afford to lose any more time in mobilising our employment response.  The main measures today will take time, so government needs to move quickly to use the Flexible Support Fund and contract with private recruiters (as set out in the detailed Plan for Jobs) so that those leaving work this summer are getting the help they need.

Second, central government cannot do this alone – there was no mention today of the role of local authorities in helping to co-ordinate and lead the response locally, or of the voluntary and community sector in engaging and supporting those out of work.  To make matters harder still, we are starting from a very low base – with the contracted-out employment market just one sixth of the size that it was on the eve of the last recession.

Third, we must not lose sight of those already disadvantaged in the labour market, and particularly those with health conditions and disabled people.  Nearly half of disabled people are out of work, and we know that many of those who have been off work will need more support to return.  The government announced an extension of the Work and Health Programme today, but far from increasing support for those with health conditions this will instead be used to increase capacity for the short-term unemployed.  We also need to see a far greater focus on rehabilitation and support for those with health conditions and disabled people.

And finally, even with the scale of the response today, there will surely be concerns about whether this will be enough.  To take one example, the maximum value of the ‘kickstart’ subsidy for young people will be a quarter lower than that offered through the Future Jobs Fund, but is intended to create four times as many jobs.  Whether it can fund the sorts of transitional jobs for disadvantaged groups that the FJF delivered will remain to be seen.  Furthermore, the £100 million investment in support for 18-19 year olds will repair just a fraction of the cuts in further education funding in recent years – we will surely need more than this in the coming months.

All told though, today’s announcements are welcome and comprehensive.  It is clear that we will be dealing with the labour impacts of this crisis for years rather than months, but today’s measures should help to mitigate the worst impacts on many households and to support the recovery.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.