Britain’s youth unemployment crisis is not simply a problem for young people looking for their first job. It is also a sign of a wider problem with the cost and confidence required for businesses to employ people, according to the Confederation of British Industry (CBI).
The CBI has warned that stronger economic growth is needed to change the prospects of more than a million young people who are not currently in education, employment or training. Its argument is that businesses need the confidence and capacity to invest in people, rather than continuing to operate mainly from a position of caution and cost control.
This is an issue that is relevant to Colchester as well as to the rest of the country. The city has a diverse economy, a large student population and a number of employers across retail, hospitality, professional services, education, health, construction and other sectors. However, the availability of jobs alone does not guarantee that young people will be able to move successfully from education into employment.
The CBI report proposes a practical approach to changing business behaviour. Rather than seeing young workers mainly as an additional cost, employers should be encouraged to see investment in young people as part of the long-term health of their businesses. This means creating more jobs, apprenticeships and opportunities for work experience.
The argument comes at a time when businesses across Britain are facing significant costs. Wages, energy, property, taxation, regulation and other operating expenses can make employers reluctant to expand their workforce. For smaller businesses in particular, taking on a young person can be seen as a financial risk if there is uncertainty about future demand.
This creates a difficult cycle. Businesses are cautious because costs are high and economic conditions are uncertain. Young people then have fewer opportunities to gain experience. Without experience, they can find it harder to secure permanent employment. Businesses subsequently complain about skills shortages, while a section of the potential workforce remains outside the labour market.
The CBI believes this cycle needs to be broken through economic growth and a more supportive approach to employment.
Rain Newton-Smith, Chief Executive of the CBI, described youth employment as one of the defining challenges facing the Government. She argued that the issue is both an economic and social concern, because young people who cannot enter the labour market lose opportunities while businesses and the wider economy also lose out.
The problem is not only about the number of vacancies available. There are wider issues involving health, education, welfare and other areas of government policy. Some young people need additional support before they are ready to enter employment. Others may need help with qualifications, confidence, transport, applications or workplace experience.
This wider approach is particularly important at local level.
In Essex, the Youth Service provides support for 16 to 18-year-olds who are not in education, employment or training. Its advisers can help young people consider college, apprenticeships, training, jobs, work experience and volunteering. They can also provide support with CVs, applications and interviews.
Colchester has its own role to play in this system. The city council has identified inclusive economic growth, skills development and support for businesses as important parts of its economic approach. Its economic development strategy has highlighted the need to help local workers develop the skills required for future opportunities while supporting businesses and investment.
The council also provides apprenticeships and work experience opportunities of its own. Its apprenticeship scheme covers areas including customer service, business administration, events, learning and development and digital support. Apprentices receive workplace training alongside recognised qualifications.
These schemes demonstrate the type of practical action that the CBI is calling for, although responsibility cannot rest with councils alone.
Local businesses have an important role. For a young person, a first job can provide more than an income. It can provide references, workplace skills, confidence and an understanding of what employers expect. Even a short period of meaningful work experience can make the transition from education to employment easier.
However, businesses also need to be able to make these opportunities available. If employing someone is considered too expensive or too risky, employers may reduce recruitment or look for people who already have significant experience. This can leave young people caught in a familiar problem: they cannot get experience without a job, but cannot get the job because they lack experience.
For Colchester, this matters because the city’s future economic growth will depend partly on having a workforce with the right skills. The city is already planning for further growth, with its latest evidence base including an updated Employment Study to support the Local Plan through to 2043. The council says the study is intended to help ensure that there is sufficient employment land and suitable policies to support sustainable economic growth.
Investment in the local economy therefore needs to include investment in people.
Colchester’s city centre regeneration programme is another example of where this could matter. The council says more than £40 million of government investment is being dedicated to ongoing city centre regeneration by 2030. The programme is intended to improve the city’s competitiveness for talent, skills and investment, strengthen infrastructure and support businesses to start, recover and grow.
New investment can create employment opportunities, but there is no guarantee that young people living locally will automatically benefit from them. There needs to be a connection between investment, employers, schools, colleges, training providers and young people.
That connection is already developing in parts of Essex. The Essex Youth Service’s current provision includes support for young people who need help finding work, apprenticeships and training. In Colchester, regular Get On Track sessions provide advice on education, employment and training, including help with CVs, applications and interview preparation.
There are also local training opportunities. Current Essex Youth Service information highlights provision in Colchester that can help 16 to 18-year-olds develop English, maths and other skills while gaining work experience and being supported towards apprenticeships or employment.
The challenge is to make these opportunities large enough and accessible enough to have a meaningful effect.
The CBI’s message is ultimately about changing the way the problem is viewed. Youth unemployment should not be treated simply as a matter for employment services or young people themselves. It is also an economic issue involving business investment, productivity and future skills.
For Colchester, the argument is particularly relevant as the city plans for continued growth. If businesses expand but young residents are unable to access the resulting opportunities, the benefits of growth will not be shared evenly. If, on the other hand, local employers are able to recruit and train more young people, the city can develop a stronger pool of workers while giving individuals a better start to their working lives.
There is no single solution. Government has a role in reducing unnecessary barriers to employment and supporting education, health and welfare. Local authorities and training providers have a role in connecting young people with opportunities. Schools and colleges have a role in preparing students for the workplace. Businesses have a role in creating jobs, apprenticeships and meaningful work experience.
The CBI is right to point to the wider cost of doing business. But there is also a cost to not investing in young people.
For Colchester, the issue is not simply how many young people are unemployed today. It is whether the city can ensure that its future economic growth creates opportunities for the people who live here. If young people are given the chance to gain skills, experience and employment, they can contribute to local businesses and the wider economy for decades.
The alternative is a continuing loss of potential. That would be costly for young people, businesses and communities alike.
