Greater Manchester’s youth claimant count at lowest number since records began

Christian Spence, Research Manager at Greater Manchester Chamber of Commerce

Commenting on the release of labour market data from the Office for National Statistics, Christian Spence, Head of Business Intelligence at Greater Manchester Chamber of Commerce, said: "The number of people in Greater Manchester claiming Jobseeker's Allowance continues to fall, with the usual seasonal recruitment for Christmas trading reinforcing the strength of the underlying data.

"With the claimant count overall now standing at 35,465, this is the lowest figure since December 2004.

"All local authorities have again seen a fall in their JSA numbers this month, and the positive trend continues. For the under-25s, the same trend can be seen with a fall of 905 in the latest data to 6,630, the lowest number recorded since records began in 1985.

"However, we have known for some time that the official claimant count statistics have been under-reporting the number on out-of-work benefits because of the roll-out of Universal Credit in Greater Manchester since April 2013. The latest experimental statistics from the Department of Work and Pensions indicate that there are an additional 7,890 people in Greater Manchester who are claiming Universal Credit whilst unemployed and would otherwise appear on the total claimant count but are currently not recorded there because this data is not yet an official statistic. Taking these individuals into account, we estimate that the real level of Jobseeker's Allowance within Greater Manchester would be 43,355, which would indicate a decrease on the year of 19,865 (31.4%) rather than the official data’s 43.9%.

"Because the roll-out of Universal Credit was focused on a small part of Greater Manchester and particularly those claimants who have easier profiles (mostly single young people with no dependents), the official statistics undercount more significantly for those local authority areas and for the under-25s particularly.
"Research by Greater Manchester Chamber of Commerce shows that, taking into account the numbers of people claiming Universal Credit in lieu of the normal route of JSA, the number of under-25s claiming out-of-work benefits in Greater Manchester is 4,418 higher than the official data and totals 11,048 instead of the currently published 6,630. This means the fall in out-of-work young people over the past year is 4,242 or 27.7% instead of the quoted 56.6%.

"The Chamber's research also highlights the much greater effect in those areas such as Oldham and Tameside that were the first to adopt the Universal Credit system. Using our methodology we believe the true number of people claiming out-of-work benefits in Oldham and Tameside is 69.5% and 41.7% respectively, higher than officially recorded by the claimant count. For under-25s, the discrepancy is greater still, with our estimates indicating that the total is 1,038 (288.3%) higher in Oldham and 681 (162.1%) higher in Tameside than the claimant count suggests.

"None of this research removes our confidence that the region's economy continues to perform well and the release on Friday 23 January of our Quarterly Economic Survey for the last three months of 2015 indicates that Greater Manchester is continuing to grow strongly. However, if we are to ensure that targeted support for those currently outside the labour force is to be delivered efficiently and effectively, we must understand fully the real dynamics of the system as a whole. Much more needs to be done to create a more composite coverage of the Universal Credit system and the numbers to be available publically allowing for greater analysis and a truer representation of the levels of unemployment across Greater Manchester and the boroughs that make up GM."