New unemployment figures - 2.38m unemployed, but claimant count less than expected

Submitted by Daniel on Wed, 15/07/2009 - 10:09am

The June labour market figures were released this morning. The headline figures are:

  • Working age employment was 72.9% in the three months to May 2009, down from 74.9% employment a year ago
  • Unemployment is now 2.38m in three months to May, or 7.6% of the working age population, up from 5.2% a year ago
  • Claimant count in June 2009 was 1.56m or 4.8% of the working age population. This is up from 843,200 or 2.6% a year ago.

What does this mean for providers?

Claimant count is the important one for figuring out how many new people are likely to come through the doors, and most primes on FND will doubtless have done some fairly complex local level modelling of what's happening.

As a rough guide, there's been an 85% rise in claimants over the past year. There are some obvious flaws in using this as a guide to the number of extra people coming through the door in the coming months. Chief among these is the changing delivery landscape. FND and the Young Person's Guarantee will only take place after the new Jobseeker's Regime support from Jobcentre advisers, which should reduce the proportion of claimants reaching 12 months. Also tipping the scales in various directions are the increased difficulty of getting a job, and the changing job readiness of the claimant base.

Supposing claimant count peaks at 2m sometime over the next year, that would represent a 137% rise in claimants over June 2008, or about two and a half times the number of claimants. This fits with the FND contract revisions to allow for two to three times the number of customers coing through the doors. Incidentally, a number of providers are saying that there are likely to be fewer customers than they expected, although it's not clear whether this is due to claimant counts, the new 18-24 regime, or the increased efficacy of Jobcentre advisers in the FND Gateway period.

Wrinkles

While unemployment is now at its highest since 1995, roughly as expected, the claimant count is lower than expectations. This means that a surprisingly high proportion of unemployed people are not claiming unemployment benefits. The point's been made in various CESI briefings that, during a recession, the unemployment count and claimant count tend to converge toward the same figure. It's not clear why this isn't the case so far, but it could be a temporary blip, or it could be a symptom of the JSA rate being so low that people simply aren't finding it worthwhile to claim.

Further information