Today we publish the second in our series of ‘provocation papers’, commissioned as part of the Work Foundation’s Centenary year. Authored by Professor Anne Green, this paper explores spatial inequalities in relation to employment. Although it was written prior to the COVID-19 crisis, the insights and analysis it presents us makes clear the significant challenges that will face different people and places as we plot a route to recovery over the coming months, and the distance we still have to travel to ensure towns, cities and regions across the UK are equipped with the powers they need to grow their economies in the future.

One particular area of focus for Professor Green is the worsening labour market outcomes of young people over the course of the last decade. She notes that since the 2008 financial crisis, the occupations available to young people have increasingly become low skilled – with a high proportion of young people employed in sales, customer service and elementary occupations. Together with the so-called ‘hollowing out’ of mid-tier jobs in many sectors, many young people have found it increasingly difficult to access high quality work, or progress in their careers.

The COVID-19 crisis stands to significantly exacerbate these trends. Already, one third of 18-24 year-old employees (excluding students) have lost their jobs or been furloughed, compared with one-in-six 35-49 year olds. And this situation is likely to significantly worsen, with unemployment already rising and the Bank of England predicting the worst recession the country has seen for 300 years. And those sectors where many young people find their first jobs, such as retail and hospitality, are those most significantly impacted by the lockdowns associated with COVID-19. The Prime Minister has already signalled that the Government recognises these challenges, this week promising an apprenticeship to every young person but a range of further measures will likely be needed to equip young people to successfully enter the labour market.

Crucially, this economic turmoil will not simply present a significant challenge to these young people in the short term; as Professor Green highlights, when young people cannot make a smooth initial transition into the labour market, evidence suggests there is a ‘scarring effect’, which can lead to periods of unemployment and lower wage levels persisting, with implications for lifetime earnings, savings and pensions, as well as for individual well-being.

This speaks to the urgent need for a substantial and sustained policy response from national, devolved and local administrations to support young people in the years ahead. In her paper, Professor Green argues that historically the interventions to support young people into employment that have tended to be the most successful are those delivered at the local level, reflecting the significant differences that often exist between regional, urban and rural economies, and with the active involvement of local employers.

She highlights the example of Greater Ipswich’s ‘MyGo’ scheme, which was the UK’s first youth employment centre in Ipswich, offering 16-24 year olds in Ipswich and the surrounding area co-located free training, career and employment support, and additional, more intensive, caseworker support to complement that provided by the public employment service. Professor Green also highlights the work of Liverpool Chamber of Commerce which has utilised employer networks to support the design and offer of apprenticeship training to young people, so emphasising the value of collaborating with local partners and using local labour market information to tailor interventions to local needs.

And yet following a decade of austerity, not to mention the additional responsibilities placed upon local and regional government during the current crisis, resources and capacity within places to provide this kind of support to young people will likely be constrained. Furthermore, the uneven nature of devolution within England and across the UK means the nature and level of support available to you will likely vary depending on where you live.

Over and above the Prime Minister’s announcement this week, it will be key for Government to support local agencies and authorities to respond to the needs of young people in the area in the months ahead, either through additional funding or the devolution of further strategic powers, while also encouraging and incentivising the private sector to do likewise. Because without additional action, we risk seeing a generation’s work prospects permanently harmed.

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