Despite the ending of the Job Retention Scheme, good news continues for the labour market. The claimant count continued to decline in most cities in October and November; while employee-based data shows some encouraging signs.
The Centre for Cities’ UK Unemployment Tracker which now includes a new variable on the number of employees in the economy, shows the performance of labour markets post-JRS for British cities and large towns.
Here are the key findings.
Claimant count continued its gradual decline but all cities remain above its pre-pandemic levels
As of November 2021, around 1.9 million people (4.6 per cent) were claiming either Job Seekers’ Allowance or the work-component of Universal Credit. This means a marginal reduction of 38,000 claimants when compared to October and is a significant improvement from the 2.8 million claimants registered in August 2020 (6.4 per cent). And November’s claimant decline was observed in every city and large town except for Hull and Ipswich.
That said, there are still 650,000 more claimants than before the pandemic (March 2020), and the rate is higher in every city and large town in the UK. In five cities – Luton, London, Slough, Bradford and Peterborough – the claimant count is 2.5 percentage points higher than in March 2020. And even cities closer to their pre-covid claimant count, such as Swansea or Wigan, are still 0.7-0.9 percentage points above their March 2020 levels.
Moreover, of the 63 cities analysed, only York, Exeter and Cambridge have a claimant count rate below the pre-pandemic national average (3 per cent). On the opposite side of the spectrum, claimant count rates in Birmingham, Bradford and Hull continue to be above 7.5 per cent, more than twice the national pre-pandemic average.
Figure 1: Change in the claimant count, November 2021 compared with March 2020 (percentage points)
| Rank |
City |
Change in the claimant count, November 2021- March 2020 (p.p.) |
Claimant count, November (%) |
Rank |
City |
Change in the claimant count, November 2021- March 2020 (p.p.) |
Claimant count, November (%) |
| 1 |
Luton |
3.9 |
7.2 |
54 |
Plymouth |
0.9 |
4.4 |
| 2 |
Slough |
3.4 |
6.4 |
55 |
York |
0.9 |
2.2 |
| 3 |
London |
2.8 |
5.8 |
56 |
Wigan |
0.9 |
4.8 |
| 4 |
Bradford |
2.7 |
7.9 |
57 |
Birkenhead |
0.9 |
4.6 |
| 5 |
Peterborough |
2.6 |
6.4 |
58 |
Newcastle |
0.8 |
5.5 |
| 6 |
Crawley |
2.5 |
5.4 |
59 |
Exeter |
0.8 |
2.5 |
| 7 |
Northampton |
2.3 |
5.3 |
60 |
Middlesbrough |
0.8 |
5.9 |
| 8 |
Birmingham |
2.3 |
8 |
61 |
Sunderland |
0.7 |
5.9 |
| 9 |
Leicester |
2.2 |
5.1 |
62 |
Swansea |
0.7 |
4.1 |
| 10 |
Derby |
2.1 |
5.8 |
63 |
Dundee |
0.7 |
5.2 |
Source: ONS
The number of employees is mostly above pre-pandemic levels, even though claimant count remains higher
PAYE-based data shows that November was the third month in row in which the number of employees in the UK was higher than February 2020. There are around 420,000 more employees than before the pandemic. The recovery in cities and large towns has been slightly slower than the average, with the number of employees 1.3 per cent greater than in February 2020, compared to 1.5 per cent for the UK as a whole.
The estimated increase in the number of employees over the last two months (October and November) suggests that the employment creation was not interrupted by the end of the Job Retention Scheme in September. Even the places in a more vulnerable position, either with fewer employees than in early 2020 or high JRS take-up rates, had an increase of the number of registered employees.
The observed improvements in the labour market have not been distributed equally across the UK’s cities. As illustrated in Figure 2 (below), there are nine cities that still have fewer employees than in February 2020 and most of them are located in the South of England, with Crawley lagging the most (-3.4 per cent below February 2020). London has just returned to its pre-pandemic numbers. Meanwhile, cities that are showing the strongest recovery are mostly in the North of England, with Blackburn and Liverpool having around 4 per cent more residents in work than before the pandemic.
Nevertheless, the recent employment recovery did not bring the claimant count down to pre-pandemic levels. One of the potential explanations for this is the number of previously self-employed (who aren’t included in the PAYE data) that are currently claimants. The most recent data on self-employment (August) shows that there are 700,000 fewer self-employed than in February 2020. And a growing population means that even returning to February 2020 levels means that the number of jobs per working age person could still be down.
Reaching pre-pandemic employment is far from achieving levelling up
These findings paint a positive picture of the recovery of the jobs market, with cities and large towns in the North and Midlands leading the way. As ever though, it’s important to note that while recovering the ground lost since March 2020 is very good news, in many of these places the pre-pandemic jobs market was struggling. So while the pandemic hasn’t made levelling up these places comparatively more difficult, it hasn’t made it any less pressing either.
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