Location, location, location

When it comes to youth unemployment, location matters.  The latest report in the Missing Million series, published last week identifies clear geographical disparities across the UK.  Although nationally one in five young people is out of work, this headline figure masks the true extent of the problem within some towns, cities and regions.

 As the UK begins to recover from the economic recession, it is tempting to think that youth unemployment will recover with it. However, the report points to structural challenges of the youth labour market that are not merely symptomatic of the recession.  Many of the places currently experiencing the highest levels of youth unemployment are the same places that have experienced economic difficulties for some time.

In London the disparities are stark, with some boroughs seeing youth unemployment rates of 9% and others 26%.  Up and down the UK the story is the same.  It is tempting to conclude that we must put all our efforts into cities such as Middlesbrough, Barnsley and Glasgow (all have rates over 25%) and ignore those cities with comparatively low levels such as Southampton, York and Cambridge (all have rates below 13%).  However, when compared to Germany, which has a youth unemployment rate of 7%, the UK’s disparity is not between high and low levels, rather it’s between high and higher levels.

Skills play an important role in determining the employability of young people.  However, contrary to common consensus, it’s not as simple as low skills equals’ high unemployment.  Geography again has a role to play.  The evidence suggests that low skilled workers do better in more successful economies.  Young people with low or no qualifications have much higher rates of unemployment on average, but cities with high concentrations of high skilled workers generate higher demand for low skilled work, such as in restaurants, bars and security services.  Those earning low wages often find it difficult to re-locate or travel long distances to more successful cities, as a result of, amongst other things, high housing costs and the availability of public transport, and so those living in struggling cities have less employment opportunities.

The paper calls for both national coordination and targeted local intervention.  No one government department or agency can tackle youth unemployment alone and better co-ordination is necessary.  Impetus-PEF is going a step further by calling for a “time-limited” Secretary of State for School to Work Transitions, responsible for co-ordinating efforts across Whitehall and Westminster, ensuing there are clear pathways to employment for all young people, including further development of quality apprenticeships and traineeships, including in those industries that employ large numbers of low skilled young people such as retail, health and social care.

However, a national response alone is not enough.  The paper also calls for the development of Local Transition Partnerships (LTP’s).  LTP’s would identify young people most at risk of disengaging, tackle local barriers to employment, coordinate the efforts of local service providers and engage the local business community in supporting young people into training and employment.

Youth unemployment across the UK is too high.  However, location matters.  There are huge disparities in youth unemployment levels between cities.  Young people with low or no qualifications have a particularly tough time finding work, especially in less economically successful areas.  The challenge for us as a country is to both have national government’s leadership in setting the policy framework that ensures every young person, leaves education with the qualifications, skills and experiences required for the transition from education into employment, and local area solutions that take into account the particular challenges those areas face.

Impetus − The Private Equity Foundation
About The Author
Rhian is the Director of Policy and Campaigns at Impetus - The Private Equity Foundation.

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