As we officially move into recession, job losses are already beginning to put added pressure on our unemployment and skills systems.
An integrated strategy for employment, skills and economic development as well as bespoke approaches for the recently and long-term unemployed will be crucial to weathering the storm, writes CFE's Michael Davis.
If January isn’t typically a bleak enough time of year, this month will be even bleaker as we see the publication of new economic data that will undoubtedly show the UK to officially be in recession. As the newspapers continue to splash recession headlines, such news will be academic to those who have already lost their jobs, and sobering to those returning to work. Consequently, forecasts for the peak of what unemployment might reach continue to rise with the symbolic three million figure moving rapidly from ‘possible’ to ‘probable’ in early 2010.
Rightly, the majority of energy is being directed towards seeking to restore confidence in markets and to provide assistance to those who lose their jobs. What I’d like to offer, however, is an observation that comes from accepting that we are in recession and that the only certainty is uncertainty and to ask - what were you doing 17 years ago?
The early 1990s was the last UK recession, and as I was still in full-time education, I can offer no practical advice on what types of initiatives worked best. I can, however, make the observation that for the last 10 years, at least employment and skills policies in the UK have all been built upon the presumption of ‘no more boom and bust’ and of near infinite expansion of employment.
On the back of falling unemployment since the early 1990s, and distinctly from 1997, we have collectively worked in a system that has assumed more than enough employment opportunities to go round and that unemployment was an individual issue rather than an economic one. Experienced practitioners would challenge this view, citing the localised nature of labour markets and employment opportunities. Nevertheless, seeing unemployment as an individual ‘problem’ has been the predominant frame for over 10 years - until now.
The increasing levels of unemployment over the last few months, which will continue this year and into 2010, arise because as the economy contracts, there will simply be insufficient economic activity to support the size of our current labour market. Unemployment won’t simply exist because people don’t have the right skills, experience or attitude; in many instances it will be because there aren’t enough jobs to go round. Accept this and there are a number of implications for policy, but I will highlight just two.
Firstly, it makes ever stronger the case that strategies for employment, skills and economic development must be integrated in a way that recognises their interdependencies. Too often in the past these have been pursued in isolation. However, there can only be employment if there is economic activity, and economic activity is, in part, a function of the skills available to a given labour market. Making this happen will require genuine inter-agency working at a sub-regional level. This will need to be outcome-driven and have sufficient flexibility to bespoke nationally-set procedures to meet local needs.
Secondly, those who have been the hardest to engage in returning to work will sink even further back as any new employment opportunities will overwhelmingly go to those who have been made recently unemployed. A meaningless statistic of ‘average time out of work’ will emerge, concealing two distinct patterns of those who return quickly and those who stay out of work for longer and longer periods. In both instances, personalised approaches are required which provide bespoke support to get people back into work. This will need to provide not only the skills required to re-enter the job market, but also a genuine appetite for progression and personal learning thereafter; recognising that economic certainty will be absent for several years to come.
What both policy implications have in common is the need for national frameworks that provide for accountability and transparency of performance. But most importantly, in delivery terms, there is a need for genuine local flexibility that is outcome focused around achieving the most important goals of employment: personal progression and economic productivity.
Michael Davis
Managing Director, CFE
The above article appeared as 'Work in Progress: What are the implications for UK employment and skills policies as we enter a recession?' in the Winter/Spring edition of Blueprint - A4e company magazine.