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The Covid-19 pandemic has already had a shattering effect on the UK’s economy and a devastating effect on employment prospects

Since February 2020, the number of payroll employees has fallen by 828,000; however, the larger falls were seen at the start of the pandemic, according to data for the Office for National Statistics (ONS).

Data from the ONS Labour Force Survey (LFS) show a large increase in the unemployment rate while the employment rate continues to fall. The number of redundancies reached a record high in September to November 2020, although the weekly data show it has dropped from the peak in September.

There are predictions of worse unemployment figures to come when the Government’s furlough scheme comes to an end in September, when firms will have to assess whether they can take back their employees on full salary.

One of the worst areas to suffer job losses is the country’s second city, Birmingham.

Some 33,000 people have lost their jobs in the city in that period, with 15 per cent of the population is unemployed. That’s almost treble the national average. It is the highest rates the city has known since 1987. If you were to rank every UK parliamentary constituency by order of the most people claiming universal credit, five of the top 10 would be in Birmingham.

There is almost certainly worse to come too. Another 55,000 people are on furlough, with officials already bracing themselves for a further explosion in redundancies when it ends.

One mitigating factor for the city could be the arrival of the Commonwealth Games in 2022 and continuing job opportunities with the high speed rail network, HS2.

Birmingham is suffering, but so is the rest of the country with 1.74 million people across the UK currently unemployed according to the ONS. It is the highest such figure in half a decade, and widely expected to keep climbing.

Birmingham’s transformation over the last three decades into a major centre of retail, hospitality, higher education and corporate tourism means it has been particularly vulnerable to the virus and the resulting lockdown. A third of companies here have either been forced to close some of the time or permanently. Even with furlough, staff have been laid off in huge numbers.

If the city has, by some measures, been an economic success story in recent years – there was record levels of both employment and direct investment before the virus hit – huge inequalities have remained. In areas such as Ladywood and Washwood Heath, endemic health issues and poor educational attainment – neither helped by a decade of austerity – have seen residents fall further behind. The virus has only compounded this inequality.

For now, the growing fear is that, as unemployment accelerates, so too will all those related social ills: mental health problems, debt, alcohol abuse, physical decline, domestic violence, family separations, homelessness and reduced educational attainment among them.

The West Midlands Combined Authority is chaired by Mayor of the West Midlands Andy Street. It comprises 18 local authorities and three Local Enterprise Partnerships (LEPs) working together to move powers from Whitehall to the West Midlands.

It has now published a plan that promises to create 100,000 jobs in two years, using private and public investment to drive growth: with HS2, the 2022 Commonwealth Games, new transport links and growing green technology harnessed to boost job numbers.

For help and advice on matters relating to employment law, contact our expert team today.

Mander Hadley

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