Youth unemployment: government must pledge £1bn to tackle crisis, experts warn

A new report by a coalition of organisations specialising in youth unemployment and training, including the Institute of Employment Studies, the Association of Colleges and the Learning and Work Institute, states that: “Independent researchers believe five years of jobs growth has been wiped out in one month, while the number of vacancies available for those out-of-work has slumped to its lowest since the mid-1990s.”

Young people along with women and the lowest paid have been hardest hit by the downturn, the report warns, as it calls on the government to create a £1bn youth guarantee and commit urgent investment in education and back-to-work support.

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Recommendations noted in the report include: 

• Targeted tapering of emergency support. Providing support to find new work for furloughed workers who lose their jobs as the Coronavirus Job Retention Scheme is withdrawn between August and October.  
• Investing up to £800 million to scale up back–to–work support for the newly unemployed. 
• Ensure the long-term unemployed and disadvantaged are not left behind by investing up to £2.4 billion in personalised support alongside access to training, volunteering and other specialist help. 
• Education and employment promise for young people. Everyone leaving education this year should be guaranteed support to find work or a place in education or training. That should include intensive employment support for all unemployed young people, underpinned by a £1 billion Jobs Guarantee for those out-of-work the longest. 
• Plan now for how to level-up access to well paid, high quality work based on understanding the future of the labour market, and ensure world class employment and skills services for all young people and adults. 

The Local Government Association (LGA) has backed the call. Sir Richard Leese, chair of the association’s city regions board, said: “Councils and combined authorities are already working closely with employers, colleges and many others involved in education and job-training to make sure that nobody is left behind after we get through this crisis, as they are ideally placed to bring employment and skills initiatives together.

“It is crucial that any interventions from the government are well-timed and best meet the needs of local residents and businesses. Local government is best placed to lead on this, and we look forward to working with government and local and national partners to plan this.”

The report comes as new figures from the Office for National Statistics (ONS) show overall unemployment figures in the UK went up by 856,500 to 2.097 million in April.

The figures, released as part of the ONS’s Labour Market overview, also show that there was an increase of more than 60 per cent in the number of young Universal Credit claimants between March and April this year. There were 235,100 claimants between the ages of 18-24 in March, compared with 378,100 in April.  

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A separate report by the Resolution Foundation found that since lockdown began on 23 March, 18- to 24-year-olds have been worst affected by losing work or income.

One third of all working adults in the age group have suffered a drop in income or working hours, the report shows. Some 24 per cent of this group have been furloughed as part of the Coronavirus Job Retention Scheme while nine per cent had lost their job entirely and two per cent saw their hours or wages cut.

This is compared with just over 20 per cent of all adults aged 18 to 65, the report shows, 15 per cent of whom have been furloughed. Just three per cent of all adults had lost their job entirely while four per cent had lost hours and pay due to the pandemic.

Youth homelessness charity Centrepoint has said the government’s Universal Credit  scheme “is not up to the task” of supporting such a surge in unemployment.

The charity notes younger people (aged 18 - 24) receive 20 per cent less in benefits compared with older age groups.

Seyi Obakin, chief executive of Centrepoint, said: “It’s clear that the economic impact of this pandemic is only beginning to be felt. The coming months could be extremely tough for everyone and all the indications are that young people are likely to be the hardest hit. The government must now show young people whose corner they are in by urgently reviewing the amount of Universal Credit they receive and increasing it to ensure it matches the true cost of living and affording them some dignity during this hugely challenging and uncertain time.”   

Polly Neate, chief executive of homelessness charity Shelter, added: “With a huge surge in people applying for benefits and early warning signs of major job losses to come, it’s clear that Covid-19 is going to send shockwaves through our economy like never before.  

“We know from our services that thousands of renters are suddenly scrambling to stay afloat, and for those who’ve become unemployed, the furlough scheme is no help at all. Many are turning to Universal Credit in a desperate bid to pay their rent but are quickly finding out housing benefit levels are too low to break their fall.   

“People paying average rents face huge shortfalls and many are racking up serious debts that put their homes at risk. Without more support, they will be swept up in a tidal wave of evictions when the government ban lifts. To prevent this, housing benefit must be increased to cover average rents and the benefit cap lifted - to give people a fighting chance.”