Chart 1: All workless benefits
The credit crunch has led to a 80,000 rise in all benefit claimants since February to 4.41 million, Inclusion estimates. The rise in the last quarter has been 66,000. The 'all benefits' number fell 236,000 or 5.2% between August 2006 and February 2008. The rise since then is 1.9%. This estimate includes continuing falls in numbers on incapacity benefits and in lone parents on income support being outweighed by sharp rises in numbers claiming Jobseeker's Allowance. The figures are showing that the welfare to work sector is beginning to face challenges not faced since 1990. This will be a severe test for the sector, while it is undergoing a complex contracting exercise.
Chart 2: Jobseeker's Allowance claimants
Jobseeker's Allowance claims have risen sharply to cross the 900,000 mark, having risen 110,000 since January this year. At the current rate of increase, the one million mark will be crossed in December this year, without adding in any of the changes to lone parent benefits and the introduction of the Employment and Support Allowance which are expected to add to Jobseeker's Allowance numbers from October this year (although the effects on the 'all benefits' number may be neutral to negative).
Chart 3: Claimants for 'inactive benefits' - incapacity benefits, lone parents etc.
Claimants for inactive benefits fell 79,000 from August 2006 to February 2008 (seasonally adjusted). These cover Incapacity Benefits, lone parents, and others claiming income related benefits (mostly pension credit). If trends continued, the number would have fallen by a further 29,000 to August 2006. Labour Force Survey figures show a fall of 32,000 economically inactive due to long term sickness, looking after family and the working age retired from February to June, so Inclusion's estimate based on trends looks reasonable.
Chart 4: Jobseeker's Allowance - new claims and leavers
Since March this year new claims for Jobseeker's Allowance (JSA) have shot up - but leavers have also gone up. The earlier rise in the JSA numbers was due to a fall in outflows not a rise in new claims, but since March everything has changed. The rise in leavers is due to large numbers leaving JSA after a very short time on benefit - so people are still finding jobs.
Chart 5: JSA: claimants staying through each three-month threshold (seasonally adjusted)
New claimants for JSA are still leaving very quickly by historical standards. Only 45% are staying beyond three months - a figure that is close to the lowest recorded. There has been a sharper rise in the proportion passing the six-month line. 52% of three-month claimants stayed over six months. The trend for the next longest group is better - this is the group (if they are 18-24) who now get extra help through the New Deal Gateway. There has been a rise in the proportions staying on, but a small one. Trends for those already longer on JSA - largely those 25 and over before they are helped by the New Deal 25+ show distinct rises in the proportions staying on JSA.
Chart 6: Unemployment (international standard measure)
Unemployment on the international standard measure (which includes unemployed people who either don't claim or are ineligible for JSA - mostly women) has risen sharply in the latest figures. At the current rate of growth a figure of 2 million for the November-January quarter is on the cards.
Chart 7: Employment - people working
Employment numbers have peaked. There is a 16,000 fall since March (the officially quoted comparison), but the published April (or March-May) figure was higher, and the fall since then is 49,000. The employment rate is down from 74.9% last quarter to 74.7% this quarter, a large drop for this indicator.
