The top line of ACEVO’s report on youth unemployment chaired by David Miliband is clear and simple – the youth unemployment crisis facing our country is a crisis we cannot afford.
The economics of the situation are stark and the detail of this report should prick the ears of politicians of all persuasions. With youth unemployment set to cost the treasury £28bn over the next 10 years – £4.8bn for the exchequer this year with an opportunity cost to the economy of £10.7bn – the sooner we act the sooner we can reap the rewards of investing in our young people and our country’s future. The imperative is as much economic as it is moral.
Igniting those of us on the left, the human cost is a still greater price to pay. ‘Wage scarring’, where young people out of work for extended periods earlier in their careers never reach the earnings of their always-in-work peers, combined with a greater prevalence of ill health and dissociation with employment, this absent early income threatens the creation of a ‘lost generation’, their communities and their families.
Disappointingly, the response of the right often only shrugs and points to market forces. ‘Governments do not create jobs, the private sector does’, they say. It’s a fallacious argument, articulated by Tory and SNP government ministers alike and ripples around the room like Thatcher’s echo.
To its credit, the ACEVO report seeks not to place itself on the political spectrum but accepts the reality of a Tory-led cabinet running an austerity-led administration, and focuses on what can be done within these parameters for young people out of work.
So there are realistic policy proposals in this report, like front loading the Work Programme, which can be done within existing budgets. Other proposals with price tags attached are considered in the context of financial promises made, but not yet committed. Ultimately, all spending commitments should be read against the opportunity cost of not acting at all.
In the case of youth employment, if the UK and Scottish governments are serious about avoiding a lost generation, then all their faculties should be focused on the objective of its eradication. Constantly questioning, reforming and seeking progress.
Procurement is the perfect example and features heavily in the report. Why not use the buying power of government to demand contractors employ so many young people per so many pounds spent? Or provide so many apprenticeships? Or provide so many graduate opportunities? There is no purer economic way for the government to spend public money than in the public interest.
But while the government must establish the framework to allow for such socially sustainable procurement, the freedom for local decision makers must be expanded to make their own calls on which particular public interest to pursue.
For example, the job market in Edinburgh is exasperated by the underemployment of graduates in key sectors, causing displacement throughout the market and punishing school leavers heavily.
Using procurement to build graduate jobs into contracts for capital projects and services would relieve a bottle neck in the jobs market but crucially, the same framework would allow another council to do something very different to address its own ends.
Social enterprises and cooperatives have their place too and have grown in the wake of an undermined and failing market-centric system. Local communities can and should be empowered to use these models and link with local authorities, business, educational institutions and the third sector to tackle the pockets of youth unemployment that blight 152 local authority areas in the UK, 21 of which are in Scotland. 600 community unemployment hotspots throughout the UK require a community response as well as a national one.
As David Miliband has said, youth unemployment still ran stubbornly at 7-9 per cent in the UK even in the boom years, therefore we face a problem that goes beyond our current economic circumstance. But the difference now is that this problem has become a crisis and as the cliché goes, a crisis should never be wasted.
To use every faculty of government to create jobs, promote growth and refocus the role of the state. To use the buying power of government to build the good society. These are the functions of a government that takes such a crisis seriously and seeks to eradicate it once and for all, in good times and bad.
Kezia Dugdale is MSP for the Lothian region and shadow minister for youth employment