Youth unemployment hotspots revealed in new report

On 8 April 2014, The Work Foundation published a new report on the geography of youth unemployment in the UK. The report is part of a multi-year programme of research into youth unemployment called The Missing Million, kindly sponsored by Impetus-Private Equity Foundation.

The most striking finding in the report is the stark divide in outcomes for young people in different areas of the UK. The report focused on the UK’s largest towns and cities. In Middlesbrough, Hull, Bradford, Doncaster and Coventry the youth unemployment rate is above 25%. By contrast, the youth unemployment rate in Southampton, Cambridge and Luton is nearly half – below 13%. Clearly, prospects for young people vary significantly in different parts of the country.

For a dose of perspective however, it is worth noting that even the UK’s highest-performing cities have higher youth unemployment rates than in Germany overall, where the youth unemployment rate is 8%. A comparison with Germany’s best-performing cities is even less flattering for the UK. The youth unemployment rate in Hamburg is just 5%.

The UK cities listed above with high and low rates of youth unemployment appear to fit a narrative of a north/south divide in the UK. However, the data shows a more nuanced picture than this; there is more variation within the north and south, and within regions, than there is between the north and the south, and between regions. For example, Southend and Plymouth both have very high rates of youth unemployment. Similarly, there are northern towns and cities such as York, Sheffield and Blackburn, and Aberdeen in Scotland – where the youth unemployment rate is low, or below the UK average. So the picture is mixed. You can look at our map of youth unemployment rates here.

Another key finding in our research is the variation in outcomes for young people with low-level qualifications, or with none at all. Unemployment rates for this group are higher, but also vary more widely in different places. Young people with low qualifications are more affected by local economic conditions. This is likely to be because these conditions affect their chances of finding work locally, but also because it is less easy for them to move to find work elsewhere or to take up a job which involves longer commuting distances. Both involve significant cost and young people with low qualifications typically attract lower wages, and so are less able to meet these costs.

The report suggests a number of ways to tackle youth unemployment in the UK. One idea is to set up “Youth Transition Partnerships” at the local authority level, which would coordinate youth services in an area and ensure a strategy is in place to support young people’s transition from education to work. We think this is an important recommendation because, currently, young people face a bewildering range of options post-education, many of which involve engaging with different organisations. This should be made simpler so that young people have a clearer idea of the options and services available to them. We also suggest, as we have in previous reports, that the Government should focus its efforts on improving apprenticeships and vocational education in the UK, and on ensuring young people have access to high quality careers guidance.

The report also discusses options available to young people who want, or need, to move to find work. An undersupply of housing in areas of jobs growth means that house prices and rents can be prohibitively expensive for young people wanting to move for work. Our report does not seek to solve the UK’s housing problems. However, we suggest that as a starting point employment services should give young people information about job opportunities across a wider area – not just in their immediate vicinity – and that transport barriers should be tackled so that young people can access jobs in nearby employment centres and areas of growth.

Impetus − The Private Equity Foundation
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