Staring into the jobs abyss

By Ann McGauran | 22 September 2020

It is clear the COVID crisis is far from over, and neither is the economic one that landed with it. The Office for National Statistics said 156,000 people were made redundant in the three months to July – the steepest quarterly rise since 2009.

The Government’s furlough scheme provided vital support for employers to keep staff on the books while they considered how many they would be able to retain. But chancellor Rishi Sunak has – so far – rejected extending the intervention beyond the end of October. Meanwhile the Institute for Employment Studies (IES) estimates that around 650,000 face the prospect of losing jobs in the second half of this year.

What role can local government play in helping support the sectors of their economies impacted most by the end of furloughing, and the people who will lose their jobs?

Senior policy researcher for the New Local Government Network (NLGN) Charlotte Morgan told The MJ that analyses of the areas that look as if they will be the worst affected by the end of the furlough scheme show they are the places where local economies were struggling anyway. These were ‘places that are more reliant on the retail and hospitality sectors for example’.

Much thinking has already gone into trying to work out ‘levelling up’ programmes to help these places, she added. ‘Now they’ve already had another big whammy from COVID affecting those same sectors. So it’s exacerbating problems that were already there, including for example in places like Crawley in West Sussex on the edge of Gatwick airport that are over-dependent on one sector for a lot of their jobs.’

Ms Morgan sees devolution as being key to more strategic and effective responses. She said the NLGN has been calling for ‘a much different approach to devolution that is more unconditional and more significant, rather than deal-making, piecemeal slow devolution – what we’re calling for is more comprehensive devolution’.

She added: ‘We need to do something completely different to what we’ve done before in order to ensure that places don’t get left behind, because there is a risk of that at the moment.’

The Centre for Cities think-tank recently published a report setting out how the Government should use the Devolution and Local Recovery White Paper to re-organise local government to level up the country, arguing that England’s 349 councils should be replaced with 69 unitary authorities. It said this would strengthen local government and align its shape to the shape of local economies.

But with the timetable for a white paper now delayed, to what extent does chief executive of Centre for Cities Andrew Carter believe councils can play any significant role in supporting local economies as the furlough scheme ends? He told The MJ: ‘I think in order to pay a bigger role they are going to need significant injections of resource to rebuild them as institutions. Through the cuts of the last 10 years most of them are adult and children’s social care delivery authorities with a bit of other things on the side. Economic development, labour market interventions and skills have all gone by the wayside. A significant rebuilding of that bit of what they do is going to be needed.’ But he warned: I’m not sure yet about whether the Government has local government in its mind as being a critical and central delivery and development partner.’

He said Centre for Cities’ analysis suggests places such as Blackpool, Hull and Bradford ‘that do now have quite high levels of claimant count numbers and chunky numbers in terms of furlough, they have a big problem.’ He added: ‘And actually if you think about the capacity and resources they’ve got to deal with it, they’ve also been on the receiving end over the past 10 years of local government expenditure cuts. They’re left with less resource to deploy, and a bigger problem to address.’

Director of IPPR North Sarah Longlands said local government can play a crucial role in ‘welfare and trying to protect and shield people in their communities from the worst effects’.

But as things stand she is pessimistic, as currently ‘local authorities really have very little manoeuvrability when it comes to trying to act to shield and support people in their communities’.

Ms Longlands highlighted the low carbon economy as one sector that could build new demand for jobs. IPPR North is to publish a report later in the autumn looking at decarbonisation of housing in the North ‘as that route out of COVID, and making sure that could be an avenue for some people to reskill and retrain after being made redundant’.

Tom Stannard is corporate director, regeneration and economic growth at Wakefield Council. He told The MJ that what local authorities are geared up reasonably well to do across the system is brokerage. ‘The joining up of councils, Department of Work and Pensions (DWP) and training provider relationships – we do that bit quite well.’

But he added: ‘The bit that we are definitely in need of support for is the funding of the retraining itself. We can be fantastic at identifying levels of need, but when it comes to the cost of training – and retraining in particular – that is a systemic problem that has been neglected for some time now.’

Does he believe regions with combined authorities and Metro mayors are better placed to develop plans to tackle a flood of redundancies and unemployment? ‘I think generally speaking yes they are, and I think there’s more incentive, infrastructure and desire and appetite for collaboration in those areas. But let’s not pretend that the monies being devolved through combined authority deals are going to solve my fundamental point about the costs of training.’

What kind of support is a county council such as Cornwall – which last week indicated it is looking to cut 200 jobs in its own authority while aiming for no compulsory redundancies – able to give those who will lose their jobs across the county? Cornwall Council’s chief operating officer Tracie Langley highlighted ‘the work our local enterprise partnership (LEP) and our business structures are doing on supporting businesses to employ more people’. On upskilling, she told The MJ ‘that is something we do through our schools and colleges and through our LEP work’.

On welfare responses, the council does ‘quite a lot of work with the DWP – and in an area like Cornwall partnerships are pretty good because we are all co-located.

‘DWP know who the people are who are going onto Universal Credit. We know the people who are going to need council tax support (CTS). Then there’s quite a lot of support with debt. We all do that together.’

At the end of the furlough scheme there will be an additional number of people who will go onto CTS and the council ‘will run out of CTS money’ by the end of this year, said Ms Langley.

Council-owned Cornwall Airport in Newquay has gone through a restructuring and reduced the amount of people who work at the airport, she added. The airport provides a fundamental connection into the county, said Ms Langley, but is ‘actually on the precipice and we are seeking further funding from Government to help us with that’.

She added: ‘Cornwall airport like all of the airport industry is on its knees. As a business it’s had to reduce the number of people who work for it to make it sustainable. So all of those industries that we have are having to lose people because they have lost income. You can’t stop that at all. But what we have to do is be able to create ways to get people new skills and encourage employers to employ people who haven’t got the right skills and skill them up. So I think that is where we need to go.’

And she has a strong message for the centre. ‘We are really good at this stuff because we know our people and what they need and we’re really good at galvanising it. It’s the resources that’s the problem.

‘We need more resources to help us over a reshaping period. We will respond to the exposures that were revealed, but we just need some time, some certainty and some resources to enable us to reshape our organisations to do that on a sustainable basis.’

Working in partnership across Lancashire to support industries and residents

Stephen Young is executive director of growth, environment, transport and community services at Lancashire CC.  Writing for The MJ this summer, he said at that stage 170,000 of the county’s workforce had been furloughed and were at particular risk of redundancy. In late May and early June, faced with an overall drop in economic output for Lancashire of between 20-25% - with a much sharper fall in some key industries such as manufacturing, tourism, retail and hospitality – the county council and a range of partners came up with an ‘ask’ to Government around four areas. These focused on keeping town centres and tourism destinations open for business, supporting local production and local purchasing, and strategic infrastructure and development. It also called for the creation of a ‘watchtower’ intelligence function to support the transfer of skills from sectors that are in decline to more prosperous target sectors including health and social care, food, energy and agriculture.

Speaking to The MJ, Mr Young said there had been rise in people claiming jobseeker’s allowance of about 31%, nearly 19,000 redundancies and 82 companies have folded -  ‘so it’s typical of what we are seeing nationally’. He estimates that anywhere between 20-45% of those who have been furloughed will be made redundant.

One action area for the council to ‘create strong partnerships for example with the DWP around the Kickstart programme’. He added: ‘One of the oddities of the programme is that you have to employ 30 people, so the council has stepped in as an organisation looking to employ these 30 people through our Boost programme, and then we in effect become the employers of these people. Then we lend them out to small and medium sized enterprises, so that the 16-24 year-old can get six months of work experience that hopefully will then lead onto a job.’

Does he believe councils such as his have enough levers they can bring to bear to mitigate the scale of unfolding redundancies? ‘If I’m being brutally honest the levers we’ve got are a little bit pathetic. The county’s made £12.8m available from our reserves and other places for people to bid in for. But the figures we’re talking about of a 20% drop off in our economy – 18 years’ growth – then £12m doesn’t even begin to address that. ‘

He continued: ‘What we do recognise is that this is very much around partnership working. So we are working with the DWP and our colleagues in districts who are going to see a massive increase in the number of people applying for housing benefit. We’re working with charities on campaigns on the impact on mental health and domestic violence to try to address some of those issues.’

But it is very much a case of working across the public sector and with colleagues in the private sector to try to address some of the economic and personal damage wreaked by the crisis, he concluded. ‘Even an organisation the size of Lancashire with a turnover of £1.6bn can’t even begin to address some of these problems.’

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