At the end of October, the Job Retention Scheme gives way to the much-reduced Job Support Scheme, which only protects “viable jobs”. While other countries such as France, Germany and Ireland are extending their schemes to hold off the economic shock of lockdown measures, the UK is opting to save money now, in a move the Institute for Fiscal Studies says is “likely to translate into sharply rising unemployment”.
In the first six months of this year, 240,000 people were made redundant, and the Institute for Employment Studies predicts a further 445,000 have lost their jobs between July and September. A record 3.4 million people applied for Universal Credit between March and June when the pandemic hit.
Employers that are planning on making 20 to 100 redundancies when the scheme ends will need to notify employees by Thursday. This may be one reason the government has chosen this week to announce measures that appear designed to manage public perception of the coming tidal wave of job losses.
As the Treasury’s new, less generous level of support was announced last week, Labour criticised Rishi Sunak for neglecting the need to train and upskill a newly jobless workforce. The shadow chancellor, Anneliese Dodds, noted that Germany’s Kurzarbeit scheme includes incentives for education and training, and that such incentives were “missing from this government’s plan”.
The government has today announced free college courses for adults in England without A-levels or equivalent qualifications. These courses will be fully funded by the government, offer “skills valued by employers” and will be available from April next year.
But while the greatest economic impact of Covid-19 so far has been the hollowing out of retail and hospitality jobs in city centres, when the “free college” offer is mapped by local authority, it appears targeted towards those areas that are the focus of Johnson’s beloved “levelling up” agenda.
Across the country, this policy looks less like a direct response to the economic damage of the pandemic and more like calculated generosity directed at the voters this government sees as most important. New Covid-19 era Universal Credit claimants have higher earnings and more savings than average claimants, suggesting that the damage inflicted by the virus crisis extends beyond those targeted for the free training.
Map by Ben Walker
The timing of the announcement – and its lack of detail – also suggests Boris Johnson was eager to defang Labour’s recent call for a “national retraining strategy”. According to briefings seen by the BBC, for example, the full list of courses deemed worthy of funding will only be published “next month”, while the specifics of the scheme will be set out in a white paper “later in the year”.
This is not only an opportunistic piece of media management, but an economic gamble. Financial support for learning and retraining is vital for a country that is undergoing, as Sunak has described, a “more permanent economic change” and is adapting to a “new normal”. A long-term transition to the jobs that are still available post-coronavirus will need mass reskilling to avoid widespread hardship and to ease the existing recruitment crises in certain sectors.
The government’s ambiguity makes scrutiny difficult, and suggests a policy that has only been half-announced is nowhere near ready to come into effect.
In the meantime, workers are already losing their jobs. If the earliest they can begin retraining is April, then they could have been unemployed for a year since the pandemic hit in March. They may also have to wait until their course begins the following academic year in September. Again, if that worker loses their job in October when furlough ends, they won’t have financial support to requalify for nearly a year.
When there is more detail available, we will have a clearer picture of which sectors the government is intent on saving, and how serious it really is about reversing the impact of a decade of cuts to further education. Yet that lack of clarity suggests a knee-jerk headline grab ahead of looming job losses, rather than an in-depth policy for vocational qualifications that rises to the challenge presented by an economic shift accelerated by coronavirus.