Sticking plaster or stepping-stone? Tackling urban youth unemployment

This paper distinguishes between two groups of unemployed young people: the majority that are unemployed for a few months, and the growing minority (currently 130,000) that have been out of work for over a year. By December 2011, the number of long-term unemployed young people is likely to reach 350,000.

The Future Jobs Fund (FJF), announced in the 2009 Budget, aims to create 50,000 jobs between 2009 and 2011 for young people who have been out of work for 12 months. This paper also distinguishes between different cities. Some cities, like Swindon and Milton Keynes, have seen a sharp increase in youth unemployment from a relatively low base. In other cities, like Hull and Barnsley, youth unemployment as increased on top of already-high stocks of unemployment.

This paper argues that the FJF is a short-term “sticking plaster” initiative and should therefore take a segmented, targeted approach:

• The FJF should focus on unemployed young people that are most “workready” and closest to the labour market; and those cities that have seen the sharpest recent increase in unemployment.

• Jobs created through the FJF should be treated as “stepping-stones” towards permanent jobs.

• Young people that are furthest away from the labour market should be supported through other programmes such as the Flexible New Deal and Working Neighbourhoods Fund.

Sticking plaster or stepping-stone is the first paper of our Surviving Recession series.