Nick Clegg launched the Youth Contract today, a £1billon fund to tackle youth unemployment. It offers wage incentives to employers, and money to create work experience places and apprenticeships. I blogged about the Youth Contract when it got its first airing back in November, but it’s worth restating two of the key points again.
Firstly, the Youth Contract should have a much stronger spatial aspect to it if it is to be effective in the places that face the largest youth unemployment problem. Around one in ten young people claim Jobseeker’s Allowance in Grimsby. This compares to less than one in 40 in York. While the impact of unemployment on a young person in York is likely to be no better than it is on a similar person in Grimsby, it is clear that there is a much larger demand problem in the latter than the former. Given that the Youth Contract is trying to tackle a demand problem, it should be focussed where this demand problem is most acute.
Secondly, the causes of youth unemployment may be more fundamental than a short term lack of demand – even if jobs were available, poor skills may be holding young people back. Our report Learning Curve showed a strong negative correlation between GCSE attainment including Maths and English and youth unemployment across England’s cities. This supports previous research that Maths and English attainment are a key factor for future employment prospects. So as a policy response to youth unemployment the Government should also be trying to improve Maths and English skills of young people too.
Correlation between GCSE attainment and youth unemployment in cities, average 2007 to 2010
Source: NOMIS 2011, claimant count 2007 to 2010 data; Neighbourhood Statistics 2011, GCSE and Equivalent Results for Young People by Gender, Referenced by Location of Educational Institution, 2006/07 to 2009/10 data. Cities in England only.
The Youth Contract is short-term in its outlook and appears to be largely spatially blind. So while the sentiment of the policy is to be applauded, it is likely to require greater focus and complimentary action on skills if it is to be successful in cities that have the largest youth unemployment problem.