By Jonathan Wright, Researcher, The Work Foundation
Published Wednesday, 16 November, 2011 - 23:03

Today the number of young unemployed people in the UK surpassed one million and next week the number of Neets among 16-24 year olds would surpass million as well. So what do we do?

Records are being broken. But new research from The Work Foundation argues that unless urgent action is taken, the situation could get even worse for a generation of young people growing up in certain towns and cities across the country. The prospects for these young people look bleak.
    
In our latest report, Off the map? The geography of NEETs, which we published alongside the Private Equity Foundation, we identified a number of NEET blackspots in Great Britain where up to one in four young people (aged 16-24) are NEET. These blackspots include smaller towns such as Doncaster and Grimsby, but also larger cities such as Birmingham and Newcastle, and parts of East London. Young people growing up in these towns and cities are more at risk of losing contact with the labour market. And, worryingly, the disparity between these places and those towns and cities with low NEET rates is growing.

The cost of being NEET at a young age can be devastating for an individual and can lead to a lifetime of labour market disadvantage - such as reduced employment prospects and wage scarring – as well as negative social outcomes. But there are also broader social and economic implications, such as increased costs to public finance (for example through benefit payments) and lost public resources (due to lost productivity). It is therefore of no little concern that the NEET problem appears to be worsening.

Young people are currently being squeezed in two ways:

Firstly, increasing unemployment has reduced the number of entry-level jobs available for those leaving education; the jobs which have normally been filled by the young are now being occupied by more experienced workers. A recent employer survey published by UKCES reported that less than one in four businesses are recruiting young people direct from education, and this is falling.

Secondly, public sector cuts (education for 16 – 19 year olds is facing a cut of around 20 per cent) are restricting youth services and the capacity of (local) government to help young people enter the labour market; simultaneously, the local operations of information, advice and guidance services such as Connexions are being wound down.
 
But Off the map? argues that geography matters too. The chance of being young and NEET is much greater in certain towns and cities across the country – places which we refer to as NEET blackspots, where up to one in four 16-24 year olds are NEET.
Many of the towns and cities that are experiencing particularly high NEET levels are former industrial towns, characterised by particularly low skills levels and a dependence on the public sector for jobs and growth. These places have low prospects for growth – as set out in our report No City Left Behind? which we published last year. Furthermore, the ‘squeeze’ on young people is particularly acute in cities which have weak economies and which are already experiencing disproportionately high levels of public sector cuts.

However, not all cities in Great Britain are experiencing such high NEET levels. Less than one in ten young people growing up in cities such as Cambridge, Plymouth and York are NEET – over half the level reported in places such as Grimsby and Doncaster. By contrast to the NEET blackspots, cities with low NEET rates often have relatively successful local economies characterised by high levels of skills and strong private sector demand - far more favourable conditions for a young person looking to find work.

There are large disparities, and these disparities are growing. But it is also important not to generalise the issue. Firstly it is not a simple north-south divide: some cities in the north such as York have low NEET levels, while places in the south such as Brighton are experiencing higher rates. Furthermore a young person growing up in a NEET blackspot such as Doncaster will face very different challenges to a young person in Swansea, or Newcastle. These places have very different economies, geographies and labour markets; and the social make up of NEETs will be different from place to place.

Our research has highlighted the urgent need for local action to tackle the NEET problem. We have identified a number of towns and cities where young people are much more likely to be NEET (and conversely places where NEET rates are relatively low). Unless targeted and coordinated action is taken – ensuring that there are clear and viable pathways between school, education and the world of work – the prospects for young people in these towns and cities look bleak.

The government’s response to rising youth unemployment -The Participation Strategy - which will set out plans to maximise the participation of young people in education, training and employment – is due out in the coming weeks. The Coalition is keen for powers to be devolved and action to be taken locally – for example schools and local authorities now have more freedom to tackle such issues. But in a time of austerity it may be difficult for some places to deliver.

We think the following action is essential: services need to be better coordinated at the local level to make sure that young people do not slip through the net; and better information is needed to understand the size of the problem and how it varies across the country. Particular attention needs to be paid to the NEET blackspots. But we can also learn from those places which have been identified as having low NEET levels. Sharing best practice between cities will be vital in order to develop successful interventions at the local level to tackle this growing problem.