More than 1.7 million now out of work, official figures show

But CIPD economist says furlough is keeping redundancies down despite ‘ominous ascent’ in unemployment, and calls for scheme to be extended until June

The number of people out of work in the UK continues to rise, the latest official figures have shown, with an estimated 1.72 million people now out of work.

According to the latest data from the Office for National Statistics, unemployment reached 5 per cent in the three months to November 2020, up 0.6 per cent on the previous three months and 1.2 per cent on the previous year.

During the same three-month period, the redundancy rate also peaked at 14.2 per thousand, with early estimates for December 2020 indicating a 2.7 per cent drop in the number of payrolled employees compared with December 2019. This equates to 828,000 fewer people in payrolled employment than in February 2020.

Jon Boys, labour market economist at the CIPD, said that despite the “ominous ascent” in unemployment, the furlough scheme was keeping job losses in check. He called for the scheme to be extended at least until June, warning that without the extra government support the risk of more job losses was higher.

“It’s worth remembering that redundancies are not an easy or cheap option for businesses, costing around £11,000 per individual. Many of these jobs stand to be viable again in just a few months' time,” Boys said, adding that an extension of the furlough scheme “would help to protect viable jobs from a period of temporary disruption while the vaccine is rolled out and buy time for the start of economic recovery”.

Nye Cominetti, senior economist at the Resolution Foundation, warned that it was young people who had borne the brunt of the crisis, accounting for almost half the job losses since the start of the pandemic. “With the risk of damaging long-term unemployment looming large, particularly when the furlough scheme ends, the chancellor should use the budget to help people back into work, and support them through a worrying period of high unemployment,” he said.

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This was echoed by Stephen Evans, chief executive of the Learning and Work Institute, who said more needed to be done to support those who had lost their jobs. “The government has taken many of the right actions, [but] delivery remains a challenge,” he said.

“Kickstart has had to be revised to get delivery going while a promised expansion in traineeships is yet to materialise,” Evans said, calling for a ‘youth guarantee’ offering a job, apprenticeship or training place to every young person.

Recently revealed figures showed that since its launch in November, the Kickstart scheme – which offers employers grants of £1,500 for every young person they take on for a six-month placement – has only had 6,368 applications and 1,868 new starts.

But today’s figures from the ONS were not all bad news. The three months to September saw an increase in the total hours worked compared to the the previous quarter – although it was still down on the previous year – and the number of job vacancies continued to recover between October and November, albeit at a slower rate than earlier in the year.

Neil Carberry, chief executive of the Recruitment & Employment Confederation (REC), said rising vacancies and hours worked were both signs that a recovery was possible. “Firms have learned how to work through Covid and, as REC data shows, some sectors are hiring strongly,” he said. “Our Jobs Recovery Tracker measured 1.77 million job ads in December – a record for the year.”