Northern towns and inner city London boroughs have become blackspots for youth unemployment, with some areas showing that as many as a quarter of 16-24 year olds are not in education, employment or training (Neet), according to a new report.
Grimsby, Doncaster and Warrington and Wigan all show a "Neet rate" of almost 25%, with other Northern and Midlands towns showing rates of around 20%. London boroughs, including Newham and Hackney, also show high levels, said the Work Foundation and the Private Equity Foundation.
Young people in these areas have been hit by a combination of post-industrial decline, rising national unemployment and spending cuts that restrict youth programmes and educational stipends. As part of its austerity drive, the coalition government has cut the Education Maintenance Allowance - which subsidised teenagers to remain in further education - as well as raising university fees and reducing funding to youth groups. The government must find ways to coordinate what services remain and create mechanisms to tackle those most at risk of losing touch with the workforce, the report said.
"The statistics are horrendous," Shaks Ghosh, chief executive of the Private Equity Foundation, said. "We’ve had over a million people not in education, employment or training for the last 12-13 years. Even when we had full employment and we had a Labour government that was pouring money into social issues, the number of young people not in education, unemployment or training stayed steady or went up." then there was the recession, and youth unemployment has gone up, which has hit the Neet figures very badly as well. We’ve got an escalating problem."
The recession hit those towns already suffering from higher Neet rates harder than London and the South East.
“A lot of these cities have experienced industrial decline and will experience several generations of joblessness. The recession has been worse in these cities than in London and the South East," Neil Lee, senior economist at the Work Foundation and the report's author, said. "Along with that, a lot of these cities were there because of the industrial revolution. Their economic rationale was coal or wool… in a lot of places, particularly places where more people are unemployed, there are fewer role models, people are less aware of what opportunities there are. It’s less easy to get work experience.”
Long term unemployment at a young age has been shown to cause deep "scarring" effects on individuals, who never fully attach to the workforce, living with lower wages, less job security and poorer mental wellbeing.
Lee's report said that while the government is unlikely to find new funding to deal with the Neet problem, coordination, so that services are not duplicated, can both save money and improve results. Focusing resources and attention on those with the highest risk indicators would also go some way to making an impact on the figures. Estimating the cost of the UK's Neet population is impossible, but even the most conservative estimates run into the tens of billions, Lee said.
“There is no new money. It’s all about making sure that the services that are being provided are being provided in a more coordinated fashion," he added. "There are no quick fixes, otherwise we would have thought of them.”