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IPPR: Hiring freeze leaves young Northerners out in the cold

Low business confidence and a lack of hiring in the North of England will lead to a sharp rise in youth unemployment this summer as young people leave school and university and begin to look for work, a new report by think tank IPPR North warns.

The report warns that, unless targeted measures to help young people are introduced as a matter of urgency, the gap between the North and other regions in the numbers of young people not in education, employment or training (NEET), will continue to grow.

The report shows that the proportion of 16-24 year olds not in education, employment or training (NEET) is highest in the North of England at 19 per cent, compared to an England average of 16 per cent and by region is:
•    20 per cent in Yorkshire and Humber
•    19 per cent in the North West
•    18 per cent in the North East
•    18 per cent in the West Midlands
•    15 per cent in the East Midlands
•    15 per cent in the East of England
•    14 per cent in the South West
•    14 per cent in London
•    12 per cent in the South East

The report argues that low business confidence is leading employers to maintain a hiring freeze across the North which is increasing the time people spend on unemployment related benefits.

New analysis in the report reveals that almost half (47%) of those claiming Job Seekers Allowance in the North have been doing so for over 6 months with the average length of time that people are claiming benefits more than double what it was during the 2008/9 recession.

The report also reveals that, where vacancies exist, they are in low paid, insecure jobs and are either part-time, or are self employed people looking for work. The decline of well paid, secure work is causing households in the North West and North East to face the biggest squeeze on household budgets compared to other regions in the country, with household incomes falling by 8% and 7% in the last year.

IPPR North argue measures introduced by the government to tackle youth unemployment will be insufficient to absorb the extra young workers entering the labour market and there needs to be targeted jobs guarantee to trigger a ‘summer hiring spree’ in the North.

The report also recommends that the North should not lose out in forthcoming announcements on investment in transport and housing infrastructure. Although such investments tend to deliver medium to long-term economic benefits, their short term impact on jobs, supply chains and business confidence in the North of England could have an important shorter-term impact.


Ed Cox, Director of IPPR North said:
“There needs to be a joint effort to prevent a big spike in NEETs numbers. Schools need to encourage their students to stay on where they can, colleges need to make extra efforts to recruit next year’s intake, public sector employers need to promote work experience schemes, but above all, employers need to take on apprentices through the various schemes now available.”


Notes to Editors:
IPPR North’s report, ‘Northern Economic Summary: June 2012’ is a quarterly economic update for the North of England. It is published today, Monday 11th June 2012 and is available to download from the IPPR North website
The percentage of people claiming Job Seekers Allowance for over 6 months is:
•    50 per cent in the North East
•    48 per cent in Yorkshire and Humber
•    45 per cent in the North West
•    43 per cent in the East Midlands
•    49 per cent in the West Midlands
•    44 per cent in the East
•    41 per cent in the South East
•    40 per cent in the South West
•    49 per cent in London
•    44 per cent in Wales
•    46 per cent Scotland
•    49 per cent in Northern Ireland

The most recent unemployment figures are available from:
http://www.ons.gov.uk/ons/taxonomy/index.html?nscl=Labour+Market

IPPR North’s Northern Economic Summary: March 2012 is available from:
http://www.ippr.org/articles/56/8853/northern-economic-summary-march-2012?siteid=ipprnorth

IPPR North’s interim report of the Northern Economic Futures Commission is available from: http://ippr.org/publications/55/8992/northern-prosperity-is-national-prosperity-nefc-interim-report

IPPR’s report – Jobs for the Future: The path back to full employment in the UK - is available from http://www.ippr.org/publications/55/7938/jobs-for-the-future-the-path-back-to-full-employment-in-the-uk
Contact:
Tamsin Crimmens 07800 742 262 / 0191 233 9051 /
t.crimmens@ippr.org

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