Number of Universal Credit claimants doubles in Staffordshire during coronavirus pandemic

Claimant numbers rose by 14,415 – or 119.6 per cent - in Staffordshire between March and July, an economic bulletin presented to county councillors stated.

The authority is expecting to see a rise in unemployment as the Government’s furlough scheme comes to an end next month.

At the latest Prosperous Staffordshire Select Committee meeting, members said the Government should be urged to extend furlough measures beyond October.

The bulletin presented to the committee said: “The claimant count in Staffordshire saw a slight rise of 705 between June 2020 and July 2020 to a total of 26,465 claimants and a rate change from 4.8 per cent to 4.9 per cent of the working age population – however, not all will be out of work. Whilst there has been some announcements of potential redundancies, due to the move to Universal Credit claimant count figures now also include those that have had a lower income through Covid-19, including furloughed staff and part time employees, short-term layoffs and the self-employed who have paused or ceased operating.

“The claimant count rate is still relatively low in Staffordshire (4.9 per cent) compared to regionally (7.3 per cent) and nationally (6.5 per cent). However, it is young people, the lowest paid (including those in manual occupations, more routine or less skilled jobs) and part-time workers who continue to feel the impact of the economic shock the most. It remains vital that these groups are supported to help prevent them becoming long-term unemployed.

“Although unemployment and those claiming benefits has not surged further over more recent months this is largely due to the considerable number of workers which remain on the Government-backed furlough scheme. However, there is concern that over coming months as the furlough scheme winds down and already announced potential job cuts become a reality there are likely to be more people that find themselves out of work.”

Councillor Ian Parry, who chaired the virtual meeting, said: “We have had updates on employment impact and furloughing and one or two other areas which seem to suggest things are still going in the wrong direction we have to admit. In Staffordshire things have probably become a bit worse than our benchmark authorities and areas.

“When you look at the period change between June and August the (unemployment) increase is amongst the highest in the region. It just suggests Staffordshire’s claimant rate has therefore increased further than others. It looks like a sharper picture for Staffordshire.

“The latest August figures suggested that we had probably got one of the highest levels of furloughed staff across the West Midlands – almost 25 per cent of working age population. The figures don’t suggest necessarily just yet that things are improving.”

Defining quarter

Councillor Philip White responded: “I think it’s fair to say that the next quarter is going to be if not the defining quarter then a very important three month period in seeing where the impact of Covid ultimately lands on the Staffordshire economy.

“In terms of the current indicators we do have quite a large number of workers who are on furlough still in Staffordshire. The make-up of the economy is such that you can see the reasons for that, because those businesses include quite a lot of service businesses who are still furloughing their staff.

“However, our unemployment rate remains much lower than both the national and regional average. It has crept up a little bit in the latest figures to 5.1 per cent but that is still a good couple of per cent below the regional and national level.

“The question is whether that is a seasonal variation at the end of summer, with some unemployment coming to an end that would happen in any year, or whether it is a trend. My honest view is that with the furlough scheme coming to an end it is likely we will see an increase in unemployment.

“I think that is expected in every part of the UK. The question is what degree of effect that has on the Staffordshire economy and then of course – crucially – what do we do in addition to our efforts to minimise the effects of Covid-19 and the end of furlough.

“It’s what do we do build back stronger and better in terms of creating new employment for people who might be losing their jobs or who have lost their jobs this year.”

Task force

Councillor White highlighted a number of schemes already in place to assist Staffordshire businesses and workers, such as the redundancy task force group which has been running for the past few months to support firms considering making staff redundant and individuals at risk of losing their jobs.

He said: “It’s already working with a large number of businesses. We don’t want to see businesses letting people go unless they absolutely have to and we’re supporting businesses in other ways to make sure, wherever possible, they do continue.

“We have made £500,000 of emergency grants to micro-businesses to help them pay their bills in the short to medium term, we have provided PPE starter packs to another 2,000 micro-businesses to help them get up and running over the summer. We have also delayed rent payments for our enterprise centres for our businesses where they struggle to pay their bills.

“We have done a lot of things that are directly within our control to support employment that is there. In addition to that we are working hard to develop other schemes that can help people who find themselves out of work to get back into work – there I would highlight the start-up support scheme.

“Interestingly – it might seem a little bit counter-intuitive – times of economic hardship are often the best times to start up new businesses. It’s a proven fact that in every recession and the time immediately post-recession you see a lot of new businesses starting up and they’re often very successful.

“We have a scheme to support 300 new businesses which the council is supporting to the tune of a third of a million pounds and we’ve had one cohort of people through already. We’re looking at a scheme specifically to look young people who might want to start their own businesses as well and tailoring a scheme to the specific needs of people who perhaps haven’t been in the workplace at all yet because they’re just leaving education or have only recently been into it but have a great business idea.”

Committee member Councillor Kyle Robinson raised concerns about the challenges faced by residents to secure Covid-19 tests to help them get back to work and school, as well as the ending of the furlough scheme.

He said: “The furlough scheme nationally is to end in October whilst other governments around Europe are extending their furlough schemes into 2021 for areas where people are unable to get back to work at the moment.

“I think we need to be doing more to make the case for the furlough scheme in some sectors. I want to understand what the cabinet member and the county council are doing to press that point with the government.”

Fellow committee member Councillor Syed Hussain said: “A constituent is saying all he wants from the county, whether your position is councillor or cabinet member, is to please use your position to lobby the Government to extend the furlough scheme because France, Germany, Spain and even the US have extended their support for working people through sector support schemes.

“If we can extend it we could save nine million jobs. It’s not only nine million jobs – it’s nine million families.”