Youth unemployment is a long-term national problem, and there is a concentration of young people out of work in UK cities. Young people make up one in five (21 per cent) of the population, yet two in five (40 per cent) of all those unemployed, and this is likely to rise further as they are disproportionately hit by the drop in labour demand caused by the recession.
The 63 largest GB cities and towns contain 59 per cent of the youth population, yet are home to 64 per cent of the young people who are claiming benefits. As cities witness a growing queue of young people outside their Job Centres, the inevitable question is: what can cities do to help their younger residents survive the recession?
Young people are not only more vulnerable to unemployment but are more likely to be 'scarred' by periods outside the labour market, facing a future of job instability and slow labour market progression.This is one of the central economic justifications for investing more money in ensuring young people, as opposed to other age groups, are not disengaged from the labour market.
The Government's answer to addressing youth unemployment and mitigating the scarring effect is a £1 billion Future Jobs Fund (FJF), announced in the 2009 Budget. The fund was designed in a very short period of time and as a result has given rise to several questions and concerns.
We have explored some of these concerns and asked how cities can best use this fund to help young people and their economies in both the short and long-term.
We conclude that as a limited fund, the FJF is best used as a short-term "sticking plaster", helping to cushion the blow of the recession. It cannot compensate for the underlying structural supply-side factors that underpin youth unemployment, or realistically create jobs for the future. It should thus have a tightly defined set of objectives – different to those of the Working Neighbourhoods Fund and other employment initiatives. Cities with more endemic problems will have to focus more on their long-term economic development plans to effectively address youth unemployment in the longer term.
Taken from the introduction to the Centre for Cities' report, 'Surviving Recession' - www.centreforcities.org