NAO examines impact of Covid-19 on the labour market, and the DWP’s employment support response

New briefing includes review of ongoing challenges faced by Department following recruitment of 13,500 additional work coaches

The National Audit Office (NAO) has published a briefing that examines how the Covid-19 pandemic has impacted the labour market, and the DWPs employment support response.

In Employment Support, published today, the NAO provides an overview of how the pandemic has increased unemployment and uncertainty about future rates of unemployment, the measures introduced by the DWP in response, and how the Department supports claimants through its front-line jobcentres and work coaches.

Key findings include that the UK unemployment rate has risen to 4.8 per cent in 2021, up from 4 per cent in late 2019, and is predicted to increase further to 6.5 per cent in the last quarter of 2021. In addition, the NAO acknowledges that the DWP responded at speed to rising unemployment caused by the pandemic - including by setting up major schemes such as Kickstart and Restart, and increasing the number of work coaches in jobcentres.

However, the NAO also highlights that the later than expected peak in unemployment - as a result of the Treasury extending the original end date of furlough to September 2021 - means the timing of the Department's employment schemes may not match demand. For example, the Department is attempting to fill 250,000 Kickstart jobs with employability support between September 2020 and December 2021, but unemployment is not forecast to peak until the end of 2021.

In addition, in relation to the DWP's recruitment of extra work coaches, the NAO highlights that, while the recruitment target of 13,500 new staff in post by March 2021 has been met, significant challenges remain for the Department that include -

• ensuring that new work coaches are trained and embedded into the organisation while also managing risks to productivity and quality;
• difficulties in embedding so many people into the organisation quickly, which may be made more difficult given the need for remote working;
• the impact on service provision of the ongoing uncertainty for the labour market when furlough ends in September 2021 - which will affect the demand for work coaches and the size of their caseload;
• reduced capacity of the jobcentre estate as a result of the need to be socially distanced in offices to meet Covid-19 regulations; and
• the need to maintain a continued recruitment effort to maintain supply and backfill attrition.

The NAO also highlights ongoing questions about how the Department can effectively assure the quality of work coach services to claimants, particularly following such a large and recent intake of new staff -

'Work coaches operate with considerable discretion to support claimants. The Department’s quality assurance over this aspect of its customer service relies more on observations by local team leaders and advice from specialist coaches than centralised monitoring. We have previously found that the Department’s approach means it cannot readily compare the quality of service over time and across locations. Ensuring so many new work coaches are performing at the level required in this type of system will be a significant challenge.'

NB - the NAO adds that it will be looking at how the DWP has managed and responded to the risks of setting up employment support initiatives at speed in its future work.

For more information, see Employment Support from nao.org.uk