Recovery and renewal: Tackling long-term unemployment

A report for the Local Government Association

The coronavirus crisis has had a profound effect on the labour market. The number of people claiming unemployment-related benefits rose sharply in spring 2020, although the furlough scheme limited the damage, protecting millions of jobs. The impact has been unequal. Some groups, like young people and older workers, and areas of the country, like London, have been harder hit than others.

The rollout of vaccines now gives us hope of a return to growth and chance to shape what a ‘new normal’ should be. But the impact of the pandemic will be with us for years to come. Employment has taken 3-7 years to recover after the last three recessions.

Our projections suggest long-term unemployment could rise above one million if we don’t get the policy response right. We must do all we can to avoid that: long-term unemployment is extremely damaging for people, employers and local communities. Our back-to-work plan must be delivered in the context of large and ongoing shifts in the tectonic plates of our economy: an aging population is increasing the need for health and social care; longer working lives combined with advances in technology increase the need for upskilling and retraining; and our new trading relationship with the EU will lead to further changes too.

All of these will have different impacts across the country, and the rise in unemployment during the crisis has been unequal too. This points to the need for a partnership approach between national and local government, and with employers, trades unions and other local partners. That’s the way to generate economic growth and make sure everyone gets the chance to benefit from it. It’s essential to make sure support is greater than the sum of its parts. We have a big challenge ahead. But with the right tools and willingness to work together we can make the decade ahead one of recovery and renewal.

Stephen Evans, Chief Executive of Learning and Work Institute said:
The longer someone is out of work, the worse it is for their health, wellbeing and future job prospects. We must do all we can to get people back to work as quickly as possible. A joined-up approach between central and local government can be central to creating jobs, boosting skills and supporting people to find work.