'Lost generation' of unemployed young people could be created by recession

LGA media release - 19 February 2009

Britain risks the creation of a 'lost generation' of young people falling into long-term unemployment because of the recession unless action is taken now, a new report published today will say.

The report, published by the Local Government Association, also warns that it could take up to a decade for some parts of the country to recover fully from the recession. Previous recessions have left increasing numbers of people excluded from the labour market - in particular amongst the under 25s and the over 50s.

The report will call for urgent action to protect and retrain the groups of workers who are most at risk of joining the long-term unemployed once the UK has recovered from the recession. In particular action needs to be taken to prevent a rise in young people not in training, education or employment (NEETs).

In the last three months of 2008:

• one in four people (38,000) being made redundant were between the age of 18 and 24
• one in four were (39,000) men over the age of 50

The recession of the early 80s saw persistent unemployment in large northern towns such as Liverpool, Manchester and Leeds, whilst the downturn of the early 90s left long-term unemployment mainly in Cornwall and parts of Staffordshire.  

The report shows that some areas will emerge from recession quicker than others based on experience from previous recessions. Some areas could take as long as a decade to recover fully from the recession. Successive recessions have added to the number of people permanently excluded from the labour market.

The LGA is calling for:

• The Government to devolve a share of the £1bn fund for training and employment schemes to local authorities to ensure people who have been made redundant get the right training
• Red tape to be cut to make it easier for councils, the Learning and Skills Councils and Jobcentre Plus to work more closely together
• A change to proposed Welfare Reform legislation to give ministers power to delegate employment programmes to councils and groups of councils

Cllr Margaret Eaton, Chairman of the LGA, said:

"Previous recessions have left tens of thousands of people unemployed for years, even decades, and stuck on dependency culture without the skills that they need to get a job. The devastating impact of this lost generation from previous recessions is still being felt in many parts of the UK today.

"People in their early twenties often don’t have the experience or training to get into the job market and those over 50 can find it impossible to retrain when they’re made redundant. These are the people most at risk and these are the people who need targeted support. It is deeply worrying that there could be even more young people simply dropping out of the system, who don’t have a job, aren’t in college or in training.

"It is vital that we, as a nation, learn from the mistakes of the past and act now to prevent more people being frozen out of the job market for decades to come. The over-centralised way that we have addressed this issue in the past has failed to stop the creep of long-term unemployment as a result of the last two decades.

"The report shows that some parts of the country will emerge from the economy at very different speeds and even within individual regions there are marked differences as to how local areas will fare. It is clear that a national, one size fits all approach to dealing with the recession simply isn’t sufficient to deal with the scale of the problem. The research shows that the best way to get people back into work is for more decisions about the employment and training to be taken at the local level, which means councils continuing to work with local people and businesses.

"Every single person being made redundant or having difficulty making ends meet should contact their council to make sure that they are getting all the advice, support and benefits they're eligible for."

ENDS

1. The report was prepared by PACEC (Public and Corporate Economic Consultants) on behalf of the LGA.

Author: LGA media office
Contact: LGA media team, Tel. 020 7664 3333