July Chair’s blog

July 14, 2021

As the country prepares for the relaxation of coronavirus restrictions from next Monday the long-term impact of the pandemic on the local jobs market is far from certain.

The furlough scheme, introduced 15 months ago, is starting to unwind and is due to end on 30 September. At its peak in May last year it was paying the wages of 8.9 million workers. Since then it’s shrunk to around 1.5 million but we’ve no idea how many of those jobs will still exist over the next few months.

Not surprisingly, the hospitality sector has made the greatest use of furlough, followed by retail, manufacturing and arts and entertainment.

At the end of May there were still more than 19,000 people on furlough in Cornwall, which is 8.5% of the workforce. Sectors with the highest numbers of people still on wage support include accommodation and food services (almost 7,400 people), wholesale and retail (2,700) and manufacturing (1,170).

Since March 2020, our area has seen 37% of workers furloughed, which is more than 83,000 people, and half a billion pounds paid out in business support grants. More women than men have been furloughed, and younger people in the parts of the economy worst hit by lockdowns account for a big proportion.

As the scheme draws to a close there are fears it has simply deferred redundancies and there will be a wave of job losses. Data from the Institute of Fiscal Studies suggests 350,000 18-24-year-olds could be at risk of losing their jobs across the UK.

And there are other dynamics at play. Travel restrictions introduced to curb the spread of coronavirus and post-Brexit immigration rules have impacted the number of overseas workers coming to the UK at a time when businesses are rushing to reopen.

The Recruitment and Employment Federation and accountancy firm KPMG reported this month that UK employers are facing their worst labour shortage in almost 25 years. In Cornwall in June there were 3,787 vacancies, up from 1,647 in June 2020, an increase of 130%.

Jobs are going unfilled across many parts of the economy such as transport, manufacturing, construction and hospitality, a critical sector for Cornwall and Scilly. And the issue seems to be spreading to higher-paid sectors like IT, accounting and engineering.

Some employment experts say workers are being put off positions with traditionally low pay and conditions, and finding other more rewarding work. The Institute of Employment Studies says one third of young people now in high-skilled work were in medium to low-skilled jobs a year earlier. That’s a wake-up call for many parts of our economy as people demand higher wages and better conditions.

In Cornwall staff shortages are being exacerbated by a housing market that is seeing rising prices, high demand and a lack of available properties.

The LEP is currently surveying the local business community on this issue but early responses suggest a significant impact on the ability of firms and the public sector to both recruit and retain staff because of the housing market.

This is especially true in private rented accommodation which is often ‘flipped’ in the summer months to cater for more lucrative holiday lettings. Covid has contributed to this as more Britons look to holiday at home this year, with one survey saying almost two thirds of Brits intend to take their main summer holiday in the UK, up from 50% in 2019. And Cornwall, as we know, is one of the top destinations.

There were skills shortages before the pandemic of course, so it’s no surprise that they are re-emerging as the economy starts up again, but I think there’s more going on. The labour markets feels different somehow and there seems to be an appetite for change. Long periods of enforced lockdown mean people are re-evaluating their lives, what they do and how they do it.

Employers need to be alive to that because I think expectations have changed and low wage sectors in particular are going to have to raise their game, which is no bad thing.

Businesses too have had to flex through Covid and Brexit. Many have changed how they operate and found new markets because traditional channels have been closed to them. That is driving the need to reskill and upskill existing and potential staff to fulfil roles that may not have existed in the business before.

And this isn’t just a ‘today’ issue. Cornwall was showcased on a global stage during last month’s G7 summit as a region that wants to lead the UK’s Green Industrial Revolution and the race to a low carbon economy. And we’ll continue to highlight that ambition ahead of the UK hosting the UN’s COP26 climate change summit in November.

But if we want to see a renaissance in Cornish metal mining to fuel the Green Industrial Revolution, or we want to fabricate and install offshore platforms for floating wind turbines, or we want to create a deep geothermal industry or a space data cluster, or further develop our famous food and drink offer or evolve a more sustainable and broader visitor economy, then none of that can happen without people who have the right skills.

And simply importing them is not the answer. We want those skills to be home-grown, to inspire our young people about future opportunity, to reskill existing workers of all ages, and nurture our own talent here in Cornwall and Scilly to fill those new, well-paid jobs and help counter some of the challenges we have.

That’s why the LEP’s Employment and Skills Board brings business and education together around the same table to anticipate what skills our economy needs now and in the future.

It’s no accident that Truro and Penwith College has just launched the Cornwall Space and Aerospace Technology Training centre in Truro, or that the LEP is investing almost £3.8m from the government’s Getting Building Fund in a new STEM and Health Skills Centre in Bodmin, opening next year.

As we emerge from the shadow of coronavirus and adjust to the trading realities of Brexit, we need to address the challenges of today and prepare for the opportunities of tomorrow.