‘One in ten’ Londoners to be unemployed by December

New forecasting commissioned by London Councils has revealed that London’s unemployment total is expected to peak at 9.4 per cent by the end of this year.

The research suggests a rising tide of unemployment due to the pandemic’s impact and the end of the furlough scheme in September. While an unemployment peak of 9.4 per cent (464,000) of economically active Londoners by December 2021 represents the ‘core scenario’, the analysis also found a ‘worst case’ scenario of unemployment hitting 11.8 per cent (580,000) by February 2022 if the economic recovery is more sluggish than anticipated.  

Boroughs say the data predicts coronavirus leaving a ‘painful legacy’ of job losses in the capital and are calling for an ‘urgent reset’ of the government’s approach to unemployment support.

London’s unemployment rate has historically been higher than national levels. Although this had narrowed over the past five years, the coronavirus crisis has increased the gap again. As of December 2020 (the latest available figures), the UK unemployment rate was 5.2 per cent and London’s was 7.1 per cent (352,000 unemployed Londoners).

London Councils is pushing for a ‘local first’ approach to unemployment support so that boroughs are better equipped to respond to their communities’ needs. They argue that, because local authorities provide such a variety of key services, jobcentres should be located alongside borough services to improve coordination of support.

Clare Coghill, London Councils’ executive member for Skills & Employment, said: “The economic fallout from Covid-19 threatens a painful legacy of unemployment in the capital. This analysis paints a grim picture of worsening job losses. It’s hard to overstate how worried we are by these forecasts. Unemployment on this scale will have serious and long-lasting consequences – including widening London’s economic and social inequalities even further.

“The Covid-19 crisis has shown time and again how councils play a vital role in responding to local challenges and co-ordinating services. With unemployment set to be one of the key concerns of the coming months and years, we need an urgent reset of the government’s approach to tackling this issue. Rather than top-down, centralised structures, the government must empower local authorities to develop local solutions for helping our residents back into work.”