Alistair Houghton examines how rising jobless figures are affecting the region

TODAY is unemployment figures day – and it’s unlikely the latest figures will bring any good news for Merseyside.

Unemployment in Liverpool city region has been rising for a year, and in June the number of people claiming jobseeker’s allowance rose to 56,560.

Despite signs that the worst of the recession may be behind us, analysts agree that unemployment rates will keep rising.

Even if the housing market returns to normal and industrial output begins to rise, unemployment will continue to lag behind as firms in all sectors continue restructuring or delay re-hiring staff until they are sure things have improved.

That puts extra pressure on JobcentrePlus and other services supporting the unemployed – and on the public sector agencies and quangos charged with maintaining the region’s economic health.

In April, JobcentrePlus received on average 90,000 claims a week for jobseeker’s allowance – compared to 45,000 a week in February last year.

This year, LDP Business has reported on thousands of job losses in sectors from food to finance.

Food firm Tulip and chemical giant Croda are shutting their Wirral factories, while banks like Barclays and Lloyds Banking Group have axed staff across the region.

Merseyside has also suffered from the collapse of some of the High Street’s best-known names, including Woolworths and Zavvi.

Economist Peter Stoney, an honorary senior fellow at Liverpool University’s management school and director of the Liverpool Research Group in Macro-economics, says unemployment will stay high until 2011.

He said: “We expect the unemployment level to increase to about 60,000 from its current level by the end of this year. And next year we think it will go on increasing into the mid 60,000s level – 65,000 roughly – because it’s much harder to bring unemployment down than it is to actually shed labour.

“We think that economic growth on Merseyside will start to increase towards the end of this year as we think it will do throughout the UK, but unemployment will be much more sticky. It’s much easier to fire people than to hire them, so we expect unemployment to be much more difficult to bring down, possibly not until 2011.”

Prof Stoney is particularly concerned about the comparatively large number of people in Merseyside suffering from long-term worklessness.

While many people who lose their jobs in the current recession will be able to find work quickly, around one in ten unemployed people in Merseyside have been without a job for longer than 12 months.

The longer people are unemployed, the more their confidence suffers and the harder they find it to find work.

As Liverpool experienced in the dark days of the recession of the 1980s, whole communities can be sent into spirals of decline by long periods of unemployment – something which policy-makers are desperate to avoid this time round.

Mr Stoney is also concerned about high levels of male unemployment in Merseyside, and says schools and colleges need to better prepare young people for the world of work.

He said: “One in five people on Merseyside leave school without any qualifications whatsoever.

“This makes it very difficult for them to get employment, even in menial jobs, so there is a big problem which needs addressing both at the educational level and in the labour market.” For Prof Stoney, the public sector needs to play its part facilitating profitable activity in the private sector in Merseyside.

He said: “It can do this in one way in particular – through building infrastructure which supports private sector, such as roads, rail, air and sea links.

“It can get those costs down which are going to make Merseyside a competitive economy compared to other economies.

“It can also behave itself in terms of keeping the council tax down.”

Prof Stoney believes that the main drivers of economic growth in Merseyside over the next decade will be the tourism, leisure and other service sector industries, as well as the logistics and financial services sectors.

Steve Broomhead, chief executive of the Northwest Development Agency, agrees that some sectors are set for growth despite the wider gloom.

He said: “There are a number of businesses in this region that are growing very well – environmental technologies, media industries, the whole area around creative and digital industries, science and biotechnology.

“All businesses are obviously under challenge, in some case threat, but there are opportunities for business growth in a number of parts of our region, particularly in Liverpool. “

The NWDA works with organisations such as Jobcentre Plus and the Learning Skills Council as it works to tackle long-term unemployment.

“Unemployment can be indeed short-term, and I hope that some of the job losses that we’ve seen in Liverpool are indeed that,” said Mr Broomhead.

“It is encouraging that we do find people bouncing back into jobs pretty quickly, but the real challenge is in those places where people have been out of work and lost hope for a long period of time.

“And that’s where the real challenges are and that’s where we work very strongly with all the partners in Liverpool and work very strongly with the Government to try to address those issues.”

Looking to the long term, Mr Broomhead says employers need to get more involved in education to ensure schools and colleges produce the skilled workers of the future.

“We’ve got to get employers much more engaged in shaping curricula in colleges and in schools,” he said.

“We’ve got to get people much more empowered about wanting to learn and I think it shows actually that more and more people are going to college and university.

“We’ve got to make sure that their skills are relevant to the needs of the employer.”

JobcentrePlus, the organisation at the sharp end of the unemployment crisis, is also looking to work more closely with employers to help its clients get back into work.

The organisation is teaming up with local companies to launch Local Employment Partnerships (LEPs).

More than 2,800 employers in Merseyside have already signed up, and, so far this financial year, 2,897 people in Merseyside JobcentrePlus District have been helped back into work by LEPs.

It is working with employers including Hilton Liverpool, which is recruiting 250 people at its soon-to-open Liverpool One hotel, and Tesco, which is recruiting another 250 people to its Litherland store.

The Government has pumped more money into JobcentrePlus to help it respond more quickly to the problem of rising unemployment, through projects such as its Rapid Response Service, the Future Jobs Fund for young people, and further schemes to help the long-term unemployed.

Gary Foulkes, senior external relations manager for Jobcentre Plus in Merseyside, said: “In recent months, we have introduced a wide variety of changes to the support available for both employers and for jobseekers.

“We cannot always prevent people from losing their job and we know it's been getting tougher for people to find a new one, but we will not give up on people and will continue to provide real help so that they can get back to work as quickly as possible.”

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alistair.houghton