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Youth unemployment could hold back ‘inclusive growth’


Youth unemployment remains high in certain regions and sectors across the UK

Highly regionalised youth unemployment could hold back ‘inclusive growth’ in the UK, particularly after the Brexit vote, a report from EY and the EY Foundation has warned.

The employment landscape for young people in the UK report from the professional services firm and its charitable foundation found large levels of disparity in the numbers of young people in work across the UK’s regions and cities.

It revealed that Bradford, Middlesbrough, Swansea and Wolverhampton have the highest youth unemployment rates in the UK (more than 25%). Regionally, the North East has the highest level of youth unemployment at 18.3%, compared to 11.2% in the East, which has the lowest rate.

Between March and May 2016 youth unemployment rates were 28.7% for 16- to 17-year-olds and 11.6% for 18- to 24-year-olds, the report states. However, this is lower than in many other European countries, such as Italy and Spain.

According to the report many sectors now employ fewer young people than a few years ago, with the biggest fall in manufacturing, which employs 28% fewer young people than it did in 2004. Construction employs 25% fewer young people than in 2004, transport and communication 26%, and financial and business services 4%. The report suggests that some traditional routes to work and skills have become harder to access.

EY’s chief economist Mark Gregory said: “A stubbornly high number of young people remain excluded from the labour market, which could be further exacerbated by a period of weaker economic growth in these uncertain times. History has shown that young people are more exposed to economic volatility and industry restructuring than the population as a whole.”

He warned that should Brexit result in restrictions of free movement of labour the UK must focus on skills, and that young people are key to this.

“It’s vital that co-ordinated action is taken by business and government to invest in the development of young people to avoid a widening of the UK’s skills gap, particularly as the demand for low-skilled workers starts to decline in some sectors,” he said. “At root level, employers have an important role to play by providing young people with the vital skills, experience and opportunities necessary to secure work in the 21st century.”

EY Foundation chief executive Maryanne Matthews called on employers to “invest in developing the skills of young people”.

“Offering paid work experience opportunities to young people could lead to jobs in the future, reduce unemployment rates and help to address the UK skills gap,” she said. “The more that employers play an active role in developing young people, the more we can help every young person to have better working prospects now and in the future.”