I know this is hard Mousie, my dh was out of work for a few months last year, and the offers were not flowing in, a new situation for us, he had easily changed jobs about every 3 years up to then.
Firstly, he has 'signed on' hasn't he. I know it's a horrible thing to do (we hated it), but it means he will get his NI credits, which are important. Also have you contacted the childrens tax credit people? Even if you didn't qualify before, you should get something after no income for 5 months, and will definately be eligible for something from april 6th onwards.
On the 'keeping spirits up' front, try to set a routine again. My dh would spend 2 hours each morning dealing with jobsearching, applications etc, and I tried to ensure he went swimming, or we went to the park together or some other activity out of the house nearly every day. I know you don't want to spend too much, but try to find positive activities you couldn't do if he was at work.
Does he need to re-evaluate his C.V., or get some advice over his interview technique? Lots of successful men have problems accepting this, but the problem is that fashions change, and recruiters look for different things than they did 5 years ago.
FWIW My dh's problem is that he is a very experienced software developer, now over 40, who DOESN'T want a management job. but all the jobs he went to assumed he would be looking to move to management as soon as he got in post.
is your dh flexible about what he wants to do?