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Job centre crisis as ten bid for each vacancy

• Grim figures reveal depth of recession
• Unemployment set to top two million

• Heather Stewart, Toby Helm and Rajeev Syal
• The Observer, Sunday 15 March 2009
• Article history

Startling new figures have revealed that on average there are 10 jobseekers for every vacancy advertised in the UK. In one area of the south-east, 60 workers are available for each job.

This week, as unemployment is expected to burst through the 2 million barrier, The Observer can reveal that the spectre of mass unemployment is forcing the government to reinforce job centres, with civil servants diverted from child maintenance and disability claims.

Already 600 staff working for the Child Support Agency, which has been renamed the Child Maintenance and Enforcement Commission, and 300 Pensions, Disability and Carers Service staff have been asked to work with the growing number of unemployed, to the anger of charities.

The full extent of the jobs misery is shown in a nationwide analysis by the TUC. In some parts of the country, the task facing jobseekers is critical. The Isle of Wight has more unemployed workers per new job than any other area. In total, there are 3,152 people chasing 52 advertised vacancies, as its main industries of tourism and manufacturing suffer from the credit crunch.

"These shocking figures blow out of the water the government's claim that there are plenty of jobs available for people who are prepared to look," said Brendan Barber, the TUC general secretary.

As unemployment has risen in recent months, Gordon Brown and James Purnell, the work and pensions secretary, have stressed the large number of job opportunities available, but the research shows that they are heavily outnumbered by unemployed workers. When Twycross Zoo in Leicestershire held a recruitment day recently to hire 150 staff, it attracted a crowd of up to 3,000 people.

Central London emerges from the TUC's research as another unemployment blackspot, where the number of vacancies is far exceeded by unemployed workers. There are just 4,275 vacancies across the 12 inner London boroughs, against almost 71,000 unemployment benefit claimants. Hackney, in east London, has 37 claimants for every new job.The claimant count, a key measure of unemployment, is expected to show a sharp rise for February of up to 90,000, when official figures are announced on Wednesday, which would make it the worst month since the early-1990s downturn. On the broader measure favoured by the government, total unemployment is almost certain to hit 2 million, or 6.5% of the workforce.

Since job losses usually lag behind an economic downturn by several months, the impact of the chaos unleashed last autumn after Lehman Brothers collapsed is unlikely to be felt until later in the spring. "There must be a good chance that we get a 100,000-plus monthly rise in unemployment soon," said Michael Saunders, chief UK economist at Citigroup.

As Chancellor Alistair Darling draws up plans for his budget next month, Barber called for more help from the Treasury for the unemployed, including an increase in jobseekers' allowance to at least £75 a week, from the current level of £60.50.

Together with the Federation of Small Businesses, the TUC is also calling for subsidies to support firms that are putting staff on to shorter working weeks on a temporary basis.

"The government must use all available means to stem rising unemployment and provide much-needed support for those who are struggling to pay their bills," Barber said. "Measures such as increasing jobseekers' allowance and introducing short-term wage subsidies could be up and running straight away and prevent unemployment reaching the levels of previous recessions."

The revelation that the government was switching civil servants from crucial jobs to deal with the unemployed has angered charities and the opposition parties.

Shadow work and pensions secretary Theresa May said: "If Labour hadn't been so negligent in closing a job centre every week during 2008, when unemployment was rising, we wouldn't be in this situation.

"We support measures to help job centres struggling with the increased workload during the recession. However, I have serious concerns about the knock-on effect this will have on the CMEC and its ability to chase absent fathers who are dodging paying maintenance."

A DWP spokesperson said: "Where there is no operational risk to the departments' services, we will loan or transfer staff from other areas of DWP, but our main focus has been to hire staff externally and so far we have recruited 4,000 new staff to cope with rising demand in job centres."

As job losses mount across the economy, analysts are becoming increasingly worried that mass unemployment will exacerbate the downturn in consumer spending and the housing crash, and create a vicious circle.

"Looking ahead, the pressing concern now is whether the rise in unemployment will become self-sustaining by creating a negative feedback loop between demand and unemployment. While we are perhaps not in this territory yet, this is a clear medium-term risk for the economy," said Jonathan Loynes, of consultancy Capital Economics.