Unemployment levels across East Midlands “could hamper growth”

There is a “huge disparity” in the numbers of young people being employed across the UK’s cities and regions, including in the East Midlands which has one of the lowest rates of youth unemployment in the country (11.7%) compared to higher levels in some of its major cities: Leicester (23.6%), Derby, (22.9%) and Nottingham (19.1%).

According to a new report by EY in association with the EY Foundation (an independent UK charity), this could have an impact on both the region and wider UK’s aspiration to achieve ‘inclusive growth’, particularly at a time when the UK’s future supply of labour and skills is at the forefront of many employers’ minds after the Brexit vote.

The report revealed that the East of England had the lowest rates of youth unemployment in the UK at 11.2% and that the North East had the highest rate at 18.3%. While the variations in youth unemployment between regions are significant, they are far exceeded by those between the UK’s cities. In every region, the majority of cities for which data is available had youth unemployment rates higher than their regional average. In the East Midlands, all three cities analysed had rates above the East Midlands average of 11.7%: Leicester (23.6%), Derby, (22.9%) and Nottingham (19.1%).

Across the UK, the report revealed an excess in the unemployment rate for 16-24 year olds. Between March and May 2016, youth unemployment rates were 28.7% for 16-17 year olds and 11.6% for 18-24 year olds in the UK.

Sara Fowler, senior partner at EY in the Midlands, said: “Youth unemployment rates have fallen from the peaks we saw during the recession, when 40% of the UK’s 16-17 year olds were facing unemployment. However, a stubbornly high number of young people remain excluded from the labour market, which could be further exacerbated by a period of weaker economic growth in a Brexit environment.

“Looking at the East Midlands, the region has a lower than average youth unemployment rate (11.7%), but what stands out are the wide-ranging variations in rates between the region’s biggest cities – with Leicester (23.6%), Derby (22.9%) and Nottingham (19.1%) all above the regional average. These regional differences underline the importance of a coordinated response from Government and business to tackle the issues locally as well as nationally. This could potentially be accompanied by more devolution of skills and education to the Midlands Engine.”