BA Budget 2021 allows for stabilisation of training and employment in difficult times

The Administrative Board of the Bundesagentur für Arbeit (BA) today adopted the budget for 2021. At the same time, the committee temporarily approved up to 5,500 additional employees.

06 Nov 2020 | Press release no.50

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The consequences of the pandemic will continue to have a major impact on the BA budget in 2021. The revenue of € 36.3 billion is offset by total expenditure of € 45.5 billion. According to the current situation, the deficit will be around € 9.2 billion. The deficit is to be made up by the remaining reserves (around € 6 billion) and a grant from the Federal Government. This subsidy has already been included in the draft federal budget law for 2021.

This year the BA is expected to spend a record € 62 billion in total. Although this level will not be reached next year as things stand at present, the expenditure remains significantly higher than in previous years.

The BA's reserves, which amounted to € 25.8 billion in 2019, will be used up at the end of 2021. Despite the enormous challenge, no meaningful funding will fall through because of the budget. In any case, unemployment benefits or short-time working allowances are compulsory benefits that are always paid out.

Investment in the further training and participation of people with disabilities

Investments in further training and qualification will continue to be a priority in the coming year and will be included in the budget with € 2.2 billion, € 100 million more than this year. Regardless of the pandemic, structural change and ongoing digitisation continue to change the labour market. The BA therefore wants to start before unemployment arises. € 890 million are available for employee training alone. The “Work of Tomorrow Act” introduced a legal right to catch up on a vocational qualification for low-skilled workers. Some € 191 million have been reserved for this purpose.

The newly elected Chairwoman of the Administrative Board Christina Ramb commented: “The budget approved today by the Administrative Board ensures that the BA is able to act on the training and labour market in difficult times. Young people can be strategically supported at the start of their working lives and job seekers can be better placed in jobs. Employers can be adequately supported in maintaining employment and in further training. What’s important to us is that  this integration and further training budget secures the necessary qualifications and placements even in the second year of the crisis.

The budget for labour market participation for people with disabilities is € 2.7 billion, € 40 million more than this year’s estimate. The aim is to implement as many meaningful measures as possible for rehabilitated persons supported by the BA.

Continued high expenditure on unemployment benefits and short-time working

The BA has set aside around € 19.1 billion for unemployment benefits. Although this is up to € 4.5 billion less than in the current year, the expenditure remains significantly higher than in previous years.

The next budget includes € 6.0 billion for the cyclical short-time working allowance. In the current year, the BA is expected to spend more than € 19 billion. Despite the predicted decline, the expenditure is very high by long-term standards.

The budget was adopted on the basis of the German government’s autumn forecast. The forecast anticipates around 2.6 million unemployed workers in the coming year. Although this is about 100,000 fewer than this year, it is still significantly more than in previous years. The Federal Government expects an annual average of 700,000 short-time workers.

Up to 5,500 temporary employment opportunities for quick benefits

The Administrative Board has approved up to 5,500 temporary employment opportunities. This staff will be mainly used in the provision of services. Anja Piel, Vice-Chairwoman of the Administrative Board commented:

“BA employees are currently working at full capacity. The granting of benefits is in the foreground and is of central importance to those affected. But it is important to the Administrative Board to quickly get the advisory and placement services up and running again, so that training can be strengthened and vacancies filled quickly. That is why the BA needs – in addition to sufficient financial resources – the necessary human resources, especially now and in the coming year. We will work to ensure that the posts decided on are filled quickly.”

So far, the BA has managed the historically high number of applications mainly with its own staff from all departments, using, for example, staff from the job centre and career guidance. They are now to return successively to their areas of responsibility so that customers can receive comprehensive guidance. Guidance and the continued rapid provision of services can only be achieved under the current conditions with additional staff.

The Administrative Board has therefore entered up to 5,500 job opportunities in the budget for a limited period. The 1,000 job opportunities already approved in September and to be filled at short notice are included in this package. In the first quarter, the Executive Board will examine whether all 5,500 positions are actually needed.

The BA’s budget must subsequently be approved by the Federal Government.