Where were people most reliant on the furlough scheme when it ended this autumn?
There were still 1.1 million people on furlough in September, and almost one third of them were in London, Birmingham and Manchester.
There were still 1.1 million people on furlough in September, and almost one third of them were in London, Birmingham and Manchester.
Nineteen months and £70 billion pounds later, the Job Retention Scheme came to an end in September. New data out today tells us how many people were on the scheme when it ended and Centre for Cities has analysed where they were.
Here are the key findings.
As of September 2021, there were still 1.1 million people in the UK supported by the furlough scheme. This shows a continuation of the previous downward trend, with around 209,000 people leaving furlough in a single month, bringing it to its lowest level since the scheme began.
All British cities and large towns saw a fall in the number of people supported by the scheme, except for Liverpool which saw its take-up rate rising to 4.2 per cent (from 4.0 per cent).
Despite the overall improvement in outlook for cities’ job markets, some places were still particularly reliant on furlough by the end of the scheme – namely those with big aviation sectors such as Crawley, Slough and Luton, where furlough rates were still above 6 per cent when the scheme ended. These places are in a particularly vulnerable position and unemployment rates are likely to see a sharp increase in the next month as international travel is still significantly below its pre-Covid levels.
Moreover, Figure 1 shows that London and other large cities such as Birmingham and Manchester had some of the largest shares of people still on the scheme when it was withdrawn. These three cities combined – which have around 22.9 per cent of the UK’s population – accounted for 30.4 per cent of all people on furlough (around 348,000 people on furlough). This is likely in part due to high numbers of people in these cities are still working from home: Centre for Cities high streets recovery tracker shows that, while daytime footfall has recovered in the centres of these cities since September, it is still well below pre-pandemic levels – meaning that shops, restaurants and bars have fewer customers and can afford less staff.
At the other end of the scale, Plymouth is the place likely to have felt the smallest impact from furlough ending – just 2.3 per cent of residents were still claiming by the end of September. It was closely followed by Swindon, Exeter and Gloucester.
There is also good news for Hull. While the city has one of the highest rates of people claiming unemployment-related benefits, it had a much smaller share of people on furlough when it ended, meaning that the end of the scheme was unlikely to push this rate much higher.
In October, data from Indeed shows job postings increasing in every city with the exception of Basildon, which remained mostly unchanged. Job postings are, on average, 45 per cent higher than their February 2020 levels, compared to 36.2 per cent by the end of February. The data shows that:
When analysing the data between the furlough scheme and the growth of job postings, Figure 3 shows that job markets across the country were in significantly different positions as the Furlough scheme came to an end. On one hand, some places, such as Plymouth, Middlesbrough and Barnsley have seen strong growth in job postings while the number of people still on the furlough scheme is relatively low. On the other, aviation reliant towns and larger cities (Crawley, Slough, London and Manchester) are in a more vulnerable position with a combination of high furlough take-ups in September and weaker job postings growth.
Source: HMRC, Coronavirus Job Retention Scheme statistics, Indeed
The strong recovery in job postings in many parts of the country suggest that many places are well placed to adapt to the end of the furlough scheme. But the next release of claimant count data is likely to bring bad news for Crawley and Luton, as well as increases in London, Manchester and Birmingham too. Given their size, increases in the latter two cities in particular will make delivering on the Government’s levelling up agenda before the next election that much harder.
Explore all of the data on Centre for Cities’ Unemployment Tracker.
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