Rebuilding after recession: a plan for jobs

Meeting these needs now is the best way to repair the economic damage caused by the coronavirus pandemic and the necessary measures taken to contain in. With government borrowing costs at record lows, [1] there has rarely been a more urgent need for government to invest. This investment – across the private and public sector can not only help create demand in the economy but be used to directly create and support jobs.

The infrastructure we need

In the March Budget, before the scale of the coronavirus pandemic became clear, government promised a programme of infrastructure investment totalling £640bn by 2024-25 and promised a National Infrastructure Strategy in ‘spring’. [2] There is now an urgent need to bring forward this spending.

New research by Transition Economics for the TUC [3] shows that a programme of investment now could create 1.24 million jobs over the next two years. Ranking a range of projects by their ability to create jobs quickly, help the transition to net-zero, and improve skills and productivity across the UK, they show that projects with high job creating potential in the next two years include:

• investment in high-speed broadband, which could help create over 40,000 new jobs
• research and development in de-carbonising technology in manufacturing, including carbon capture and storage, which could help create over 38,000 new jobs
• expanding and upgrading the rail network, which would help deliver over 120,000 new jobs
• investing in the electrification of transport, including electric buses, new electric ferries, battery factories, and electric charging points, which could help deliver 59,000 jobs
• building new social housing and retrofitting existing social housing, which could deliver a 500,000 jobs boost.

The research estimates that £85bn of investment now on these and other projects could help deliver these significant job gains.

Other projects could also make a significant difference. Early works, for example earth works and transport links for major infrastructure projects, such as new nuclear, would give a good jobs boost in specific areas of the country. Industry estimates suggest that getting going on large Gigawatt new build nuclear would provide around 20,000 construction jobs as well as supporting jobs in the wider economy, for example in steel manufacturing.

In addition to bringing forward investment, government needs to ensure that government spending is supporting jobs across the board. This means:

• Establishing a new Just Transition Commission to oversee the transition to net-zero in a way that supports jobs and workers across the UK. This should bring together workers through their unions, business, and government, including regional and local government, to set out a clear plan for meeting the net-zero target.
• Using procurement to support UK jobs by working strategically with commissioners and both current and potential providers (i) to map goods and service requirements and identify procurement opportunities in advance (ii) build capacity to bid and deliver through the supply chain and (iii) use intelligent, social value procurement to secure employment, labour standards, skills and environmental outcomes.
• Setting out an Olympics-style plan to promote good quality jobs and training on every new infrastructure project, and specifying how these projects will help deliver on a Jobs Guarantee: When the Olympics were planned, government and the Olympics Delivery Authority worked with trade unions, local authorities and others on an agreement that ensured that the project would deliver good quality local jobs and skills programmes. A similar agreement was reached to deliver HS2. We now need similar framework agreements, which set out how contractors will work with trade unions to deliver local jobs and apprenticeships, for every infrastructure project backed by government investment. These agreements also need to set out a commitment to tackling labour market inequalities and ensuring equal access to work for those with protected characteristics. As we set out below, the TUC is calling for a Jobs Guarantee to help those who have lost their jobs in the crisis get into work. Government should require investment in infrastructure projects to come with a commitment from contractors to help deliver these guaranteed jobs.

One early candidate for this approach could be the roll out of highspeed broadband. The government has already pledged £5bn to fund the rollout of ‘gigabit capable’ broadband in the hardest to reach 20 per cent of the country and has an aim of connecting every premise by 2025. At least part of this investment looks set to build upon the Rural Gigabit Connectivity Scheme with a mixture of national and local procurement. The standards on this should go further than the current basic Corporate and Social Responsibility requirements published by DCMS, for example including promotion of trade union recognition, accredited training, permanent employment contracts and career progression, so that the investment leaves a legacy of good jobs. And government should ensure that the supply chain for the delivery of the materials necessary for broadband roll- out is being developed in the UK.

Invest in public services

Investment must not be confined to infrastructure. Government investment in public services, including health, local government and social care, is not only necessary to repair the damage of ten years of austerity but a good way to increase jobs, get more money into workers’ pockets and add demand to the economy. Our response to the Covid-19 crisis has been hampered by a decade of cutting public services to the bone, which has created significant staff shortages in key areas including social care.

The recovery of the wider economy will also depend on public services, from public transport to schools and nurseries, being properly funded and able to operate safely. Investment in childcare, in particular, is necessary to stop millions of women being prevented from returning to work, losing decades of progress on women’s labour market participation, [4] while local government should play a key role in delivering the Jobs Guarantee – both co-ordinating action within regional recovery boards and in directly employing staff. Significant additional funding should be provided to achieve this goal.

Rebuilding public services is not only necessary to strengthen public sector resilience, it will also create good, enduring and socially valuable jobs. In October 2019, Skills for Care estimated that there were already over 120,000 vacancies in social care [5] – even before taking into account the need to dramatically increase the quantity and quality of provision – jobs which are located right across the country. Local authorities have suffered huge job cuts over the last ten years, jobs which are needed to deliver vital services. For example, according to the Institute for Government:

• The number of health and safety inspectors in Britain – who investigate and enforce health and safety law – declined by 52.4 per cent between 2009/10 and 2017/18.
• The number of professionally qualified food standards and food hygiene staff in England – workers who investigate complaints, inspect businesses and enforce compliance through licensing* – declined by 56.1 per cent and 16.1 per cent respectively between 2009/10 and 2018/19.
• Between 2009/10 and 2017/18, the number of full-time-equivalent (FTE) library staff fell by 37.9 per cent. [6]

Rebuilding these vital workforces should be a key part of recovery plans.

Public sector workers have not only endured increasing workloads caused by staff shortages, but have also undergone ten years of pay restraint that has left the average public sector worker £900 a year worse off in real terms than they were in 2010. Reversing this and giving public sector workers a well-deserved pay rise would not only be a good way of showing our appreciation for their sacrifices during the crisis, it would also bring wider economic benefits. The IPPR estimates that the distributional effect of increased public sector pay is similar to that from decreasing income tax, implying a GDP multiplier of between 0.3 and 1.02. [7]