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UK spending of EU youth unemployment money misdirected, says report

Youth unemployment has left "a generation scarred", according to a House of Lords report . With the rate of young jobless in the EU still at nearly double its pre-crisis level, and the UK experiencing exceptionally high levels of unemployment, the report calls on the Government to rethink the way it uses European funding. 

The House of Lords EU Committee calls on the Government to adopt the EU's flagship youth unemployment scheme, the Youth Guarantee – which would require the Government to ensure that all young people find suitable work, training or further education opportunities within four months of being unemployed. The Committee urges the Government to use EU money to support the introduction of a Youth Guarantee, rather than putting the funds towards existing domestic measures such as the Youth Contract.

The EU Sub-Committee that deals with employment, and conducted the inquiry, heard that the Youth Contract had underperformed and was not popular in the private sector, while the Youth Guarantee had been successful in other European countries.

Five regions in the UK were highlighted in the report as having unemployment levels so high that they qualified for additional EU funding. These areas were: Tees Valley & Durham; West Midlands; South Western Scotland; Inner London; and Merseyside. The Committee is urging the Government use the European funding to run pilot Youth Guarantee schemes in these five areas.

Commenting on the report, Committee Chairman Baroness O'Cathain said:

"Our report finds that a generation of young people across Europe has been left scarred by joblessness. The youth unemployment rate in the EU is more than double the general unemployment rate, and in the UK in the last few years we have seen the worst ever levels of youth unemployment. Although the picture is starting to improve, the damage has been done.

Our report looked at ways in which EU funding could be better used to help get young people into work, and we believe that the Government should rethink its centralised approach to spending EU money, and that instead it should tap into the expertise of local organisations. We would also encourage the UK Government and other Member State governments to use European money to establish new initiatives and learn from other countries."

Commenting on how the UK currently uses EU funds, Baroness O'Cathain added:

"The Government thinks it knows best in this area, but we believe that not introducing a Youth Guarantee is unwise. We would urge the Government to sign up to the Youth Guarantee instead of putting the money towards existing domestic initiatives."

Main recommendations

Overview of main recommendations in the report:

  • The Government should move away from a centralised management of EU funds and make the most of local authorities and Local Enterprise Partnerships, who have links to specialist organisations in their areas.
  • The UK should use EU funds to adopt the Youth Guarantee, rather than putting these funds towards existing measures such as the Youth Contract.
  • The Youth Guarantee should be piloted in the five areas within the UK which are eligible for additional EU funding due to their unemployment rates of 25% or more.
  • When it comes to careers advice, the Government should use EU money to fund more traditional face-to-face careers advice, rather than focusing on online support.
  • More needs to be done to address the skills mismatch in the EU – It is expected that there will be around 900,000 unfilled ICT vacancies by 2015 in the EU, while at the same time the number of ICT graduates across Europe is falling.

Case study

The Committee spoke to young people while on visits to Liverpool and Birmingham. Sana Rashid is 27 and from Birmingham. She has a Business Enterprise degree as well as three other vocational qualifications, and worked as a freelance in the beauty therapy industry before seeking work in the customer service sector.

"I've been looking for work in the customer service industry for over 18 months, and have put so much effort into landing the right job, but I've found the process extremely demoralising. I have had interviews for jobs and have made dozens of job applications but I've not had a job offer yet.

When I ask for feedback after interviews I'm told that I didn't do anything wrong, but that there simply weren't enough vacancies available, which is really frustrating to hear. For one job I went for, I was one of 200 applicants for three roles.

It's really disheartening because I have done everything you're supposed to do to get work, such as voluntary work and going on training courses. I even volunteered at a supervisory role and had great feedback from it.

It has definitely knocked my self-esteem and at times I felt as if I was never going to get a job. I'm now considering returning to self-employed work as a beauty therapist once more."

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