Unemployment during the pandemic: reasons for optimism

Even with the pandemic, there is high demand in certain sectors – and as educators, we need to equip people with the tools to get those jobs, says David Gallagher
12th November 2020, 4:49pm


Unemployment during the pandemic: reasons for optimism

Unemployment In Covid: There Are Reasons For Optimism

As we approach the festive period facing a second, nationwide lockdown, it is clear that the challenges presented by the Covid-19 pandemic will continue to bring further upheaval to all of our lives in 2021, and beyond.

The scale of the economic challenge cannot be underestimated. People will lose jobs, and find their skills are no longer in demand. While no organisation alone can solve the problems we collectively face, by working collaboratively, sharing insights and developing a coordinated response, we can support people into employment and mitigate the potential long-term impact on peoples’ lives and careers.

The government has already taken significant action to prevent job losses. The overall package of support announced so far is expected to cost £200 billion, with £41.4 billion spent on the Coronavirus Job Retention Scheme providing support for 9.6 million jobs. The scheme has been extended until 31 March 2021, raising the prospect of a winter with heavy restrictions and disruption to business. 

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The effectiveness of the scheme can vary. While half of those who were previously furloughed had returned to work by September 2020, around 10 per cent have no job to return to. Shockingly, this figure doubles to around 20 per cent for BAME (black, Asian and minority-ethinic) workers and young people.

Widening inequalities 

The widening of inequalities should be a cause of concern for us all. A McKinsey study found that globally, women were 1.8 times more likely to lose their job owing to the pandemic. Analysis from the Covid Recovery Commission, an independent group of business leaders, demonstrates through data that the pandemic is disproportionately affecting deprived communities.

Despite unprecedented levels of public spending to help to avoid redundancies, the Bank of England expects the economy to have shrunk by 11 per cent in 2020 and predicts that unemployment will peak at 7.75 per cent in the second quarter of next year. This would be the highest rate since 2013.

There are other issues that will have an impact on the economy and labour market. We are perilously close to the end of the Brexit transition period. There is huge uncertainty about our future trading relationship with the European Union (EU). Indeed, at this late stage, it remains unclear whether we will secure a trade deal at all.

It is clear that the labour market in the UK is changing rapidly. It is therefore vital that the education and skills system can quickly pivot to ensure that we are preparing learners with the right skills that will be needed by employers. Our collective response needs to ensure that we can support adults of any age to train and retrain as needed.

Adult education funding

We are not starting from an ideal place. The Institute for Fiscal Studies 2020 annual report on education spending in England found that spending on adult education is about 50 per cent lower than in 2009-10. The Learning and Work Institute’s most recent adult participation survey found that the number of adults reporting they are learning is at the lowest level in more than two decades, at just 36 per cent.

The National Retraining Scheme has so far supported a modest number of learners, with just over 3,600 people across six pilot areas accessing the first digital service. The scheme is designed to help those already in employment, so is unlikely to be an effective vehicle to support those affected by the pandemic.

The scheme will be integrated into the National Skills Fund, a £600 million per year manifesto commitment from the Conservatives. We have yet to see any concrete proposals for what the scheme will look like, but we do know that some of the money will be used to fund the Lifetime Skills Guarantee and free provision for those without a level 3 qualification. The government has yet to publish details on which qualifications will be funded, so as yet it is difficult to plan. Once we understand the size and subject areas of eligible qualifications, as well as the mode of study, we can work together to signpost learners to take up the offer.

While this is welcome, there are clearly many people who will slip through the net by not meeting eligibility requirements. For example, this funding will not support those who already hold a level 3 in a subject with poor employment prospects. There may be other learners looking for full-time study but are finding that without maintenance provision to support them while they study, they are unable to afford to access the training they need. There will also be people who need to access training at entry to level 2. These people are typically those furthest away from being able to secure a job, and need intense, targeted support.

Adults can, of course, benefit from apprenticeship opportunities, but unlike other forms of training, these opportunities can only be created by employers. We have already seen a drastic reduction in apprenticeship starts owing to the pandemic. Many employers are unsure whether they will still be available and it is too early to say whether newly introduced incentives for employers will be enough to mitigate the overall drop in the number of apprenticeships.

Reasons to be optimistic

While the overall picture is bleak, there are reasons to be optimistic. Despite many job losses, there are still opportunities out there. Institute for Employment Studies analysis of Adzuna vacancy data shows that there is still high demand from employers in healthcare and digital, while some sectors, such as logistics and warehousing, have reported significant additional vacancies owing to the pandemic. Other industries have made significant recovery, such as construction, which is also likely to be buoyed by large infrastructure projects, such as HS2.

A further reason for hope can be found in looking at how organisations have worked together during the pandemic. NCFE has worked alongside Foundation for Education Development (FED) to facilitate collaboration across the sector and share expertise. Our Centre of Excellence Partnership with WorldSkills UK, launched in September 2020 and will support educational institutions to transfer world-class expertise to educators and influence standards. NCFE is also a member of the Youth Employment Group, enabling us to form a collective response on challenges and put forward recommendations to policymakers. Furthermore, through our Go the Distance employability initiative, we are working with insightful colleagues, exploring the skills, knowledge and behaviours that young people need to find, stay and progress in work, and then putting this into action.

The key for those of us in education and skills is to understand where the opportunities will be, and how we can equip learners with the tools they need to train, retrain and, ultimately, secure a job.

NCFE is an educational charity first and foremost. Our role in supporting our recovery from the pandemic must recognise that we are much more than simply an awarding organisation. We will continue to work collaboratively with colleagues and policy makers to play our part and make a difference.

David Gallagher is the chief executive of the NCFE

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