There are two striking pieces of news on employment today. The latest figures for monthly job vacancies show the lowest figures for years and the Work and Pensions Select Committee of which I am a member has produced its Report on Commissioning and the Flexible New Deal, pointing out that increases in long term unemployment will swamp the scheme if extra funding is not provided.
Ministers like to point to the number of job vacancies as evidence that there are jobs available for the unemployed. Indeed, Conservative Ministers used to make similar claims in past recessions. Whilst true, the vacancy levels now are very low historically. Even as recently as 2007, monthly vacancies were running at 689,000, higher by 200,000.
Yet many of these vacancies are not readily available to job seekers. The National Employers’ Skill Survey shows that thirty per cent of vacancies are in the category “hard to fill” and twenty one per cent are in “skill shortage” areas. Many job seekers would simply not be qualified. There is no doubt that the Job Market is tightening sharply and unemployment will rise.
The Work and Pensions Committee has been looking at the implications for long term unemployment in our Report published today. In 2004 I proposed that the New Deal should be reformed to concentrate on those with real barriers to work and a flexible approach using private contractors – “The New Deal: What figures for the Future” with Mark Waldron (Politeia). The Government is now to implement such a scheme later this year – the Flexible New Deal – but all the evidence is that the scheme will be overwhelmed without more funding. There will simply not be enough money for each long term job seeker to be found a proper job.
Labour criticisms of Government schemes for the long-term unemployed in the 1980s concentrated on lack of substance to the training, advice and placements on offer. It would be sad for Britain if the current Labour Government failed to learn the lessons of past recessions, which they were then so willing to embrace.