Rishi Sunak, right, and works and pensions secretary Therese Coffey at a jobcentre in Barking, east London. © Simon Walker/HM Treasury

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Rishi Sunak announced in the spending review a £2.9bn programme to help Britons find work. But economists and business groups said the government had not yet done enough to ensure there would be jobs available or that people would have the skills to move into those that do exist.

The chancellor said his main new measure — the Restart programme, through which advisers will offer support to people in long-term unemployment — could help more than a million people over three years. Analysts said the level of funding suggested it would run on a much bigger scale than a similar scheme introduced after the 2008 recession.

This reflects the scale of the jobs crisis the UK faces. The Office for Budget Responsibility now expects unemployment to peak at 7.5 per cent in the second quarter of 2021 — equivalent to 2.6m people, almost double the pre-pandemic level. However, the fiscal watchdog added the extension of the furlough and other support schemes would both delay and reduce the extent of the damage.

Chart of scenarios for unemployment that shows UK unemployment is set to hit 7.5% next year

This surge in unemployment will be largely owing to a lack of hiring, with people who lose jobs struggling to re-enter the labour market as swiftly as they would in normal times. And there was little new in Mr Sunak’s statement to help either private or public sector employers create jobs.

“The Restart scheme is undoubtedly a welcome measure, but it only addresses one half of the challenge,” said Jonathan Geldart, director-general of the Institute of Directors, adding that the Treasury had “missed a trick” by ignoring calls to cut employers’ national insurance contributions.

“There is very little on job or business creation. Where was the big pro-enterprise ambition from the manifesto?” asked Craig Beaumont, chief of external affairs at the Federation of Small Businesses, adding: “We want to see more reasons for those made redundant to start up businesses in the UK.”

Mr Sunak maintains that his planned spending on infrastructure during this parliament, some of which will be brought forward to next year, will support hundreds of thousands of jobs.

But Alfie Stirling, chief economist at the New Economics Foundation think-tank, said he was surprised that the chancellor had stuck to the public investment plans outlined in the Conservative party’s 2019 manifesto, rather than going further in order to boost job creation. “All this money will create jobs — but nothing has happened to offset the increase in unemployment from the pandemic,” he said.

Many analysts also noted the absence of any significant new funding for skills and training. Mr Sunak confirmed existing plans, including the expansion of traineeships and careers advice, and funding for adults without qualifications to take technical courses equivalent to A-levels. He also extended current incentives for companies to take on new apprentices, and announced new flexibilities in their funding.

But Fiona Aldridge, director of policy and research at the Learning and Work Institute, a think-tank, said the training commitments fell short of the government's ambitions for further education, and that ministers needed to “think clearly” about how to develop economic growth “for the long haul as well as the short term”. 

Tom Bewick, chief executive of the Federation of Awarding Bodies, a trade association for further education providers, said that without proper investment in training, interventions risked being little more than fire fighting.

The government’s priority of getting people into jobs was “understandable when it comes to short-term management, but when the economy does start to recover we won’t have had the long-term investment to give people the skills they need,” he said.

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