When the COVID-19 pandemic hit, the Department for Work and Pensions (the Department) responded quickly to an unprecedented surge in people claiming benefits, by developing a new programme of employment support initiatives to help prevent long term unemployment. To achieve this the Department drastically increased its spending on employment support programmes from £300 million in 2020–21 to £2.5 billion in 2021–22 and also hired 13,500 new work coaches to support new claimants on the front-line. These work coaches will play a pivotal role in whether the Department’s employment support is a success, through the important decisions they make about what support claimants need from an extensive and growing range of options.
The full impact of the pandemic on the labour market is still not known, but it is clear that the context around the Department’s employment programmes has moved on. The Department, however, has not adapted its programmes or changed its plans. For example, the government’s Plan for Jobs, announced by the Chancellor in July 2020, included the Department’s £1.9 billion Kickstart scheme for young people. At that point, the Office for Budget Responsibility (OBR) was expecting a 10% peak in unemployment in quarter 2 of 2020, and furlough was expected to end in October 2020. The OBR now expects unemployment to peak at 6.5% in the final quarter of 2021, while the furlough scheme will not end until September 2021. The Kickstart scheme, meanwhile, is due to end in December 2021, just as unemployment is now expected to peak.
While the increase in unemployment has not yet been as sharp as feared, some groups have been affected significantly. The impact on young black people has been particularly acute, with unemployment rising to a shocking 41.6% in the last quarter of 2020 compared to an already high 24.5% a year earlier. While the Department’s major new employment support schemes aims to reduce the “scarring” impact of long-term unemployment amongst young people, it is impossible to measure its effectiveness as the Department is not publishing regular performance data, such as the take-up of schemes locally. This makes it difficult for Parliament, local authorities, or others to challenge or work with the Department to improve schemes’ impact. If government truly intends to address the issue of race disparities in unemployment, it should work with the Office for National Statistics to provide more regular statistics on the claimant count and unemployment rates broken down by ethnicity and age.