Universal Credit warning: 'Reforms' urged as state support demand to rise in the autumn

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Universal Credit and other benefit claims rose in 2020 as coronavirus forced many out of work. While much of this economic damage has been recovered from, new data shows employment shortages may force more employees into state support as the winter looms.

Today, the Recruitment & Employment Confederation (REC) released new data on employer confidence.

This data showed in the three months to July, employers’ confidence in their ability to hire new staff and make investment decisions remained high at net: +29, just below the previous rolling quarter’s record high.

Additionally, employers’ intentions to hire new permanent and temporary staff over the next three months remained stable at net: +22 and net: +26 respectively, signalling demand for workers will remain high into the autumn as businesses recover from the effects of the pandemic and deliver on new business plans.

The REC’s latest survey also found business confidence in the UK economy rose by one percentage point to net: +18, sitting “firmly in positive territory.”

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Benefit

Benefit demand may rise as the winter approaches (Image: GETTY/PA IMAGES )

While this all sounds positive, Neil Carberry, the Chief Executive of the REC, warned difficulties may be on the horizon.

“We’re well into the recovery now, and our surveys show that demand for labour remains high,” he said.

“Even with a large number of people coming off furlough in August and September, it’s likely that high demand for workers will continue to cause shortages through the autumn.

“There will be particular pressures in logistics, food manufacturing and hospitality as we gear up for Christmas, and hiring for this period has already started.

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“Hiring businesses need to reassess their plans to make sure they can source the people they need over the months and years to come.

“That means the right mix of new mid-career hires, temporary staff and trainees or apprentices.

“Recruitment and staffing firms understand this process better than anyone and are ideally placed to help.”

Mr Carberry went on to examine the pressure the Government may face in the coming months.

Universal Credit

Universal Credit demand rose in 2020 (Image: EXPRESS)

Mr Carberry concluded: “For the Government, the pressing issue is that labour shortages will limit business and economic growth in the months to come.

“It’s time to work with businesses and make the reforms needed to unemployment support and the skills system, and put more people on a path to a good job.”

The Government has made attempts to address these difficulties in recent months, with the DWP launching a “Kickstart Scheme” which provides funding to employers to create jobs for 16 to 24 year olds on Universal Credit.

Under this scheme, employers of all sizes can apply for funding which covers National Minimum Wage costs, National Insurance contributions and pension contributions.

Universal Credit itself is also designed to encourage claimants to get back into employment where they can.

Payments can also be received by those who are in employment, with the amounts awarded reducing until they are no longer needed.

Claims for Universal Credit are made online through the Government’s website.

Guidance on Universal Credit and other state benefits can be sought from the likes of Citizens Advice and Money Helper.

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