Shared contract
The government needs radical solutions to tackle youth unemployment and low growth – a local authority jobs guarantee could deliver both, argues Jacob Taylor
The country is hungry for change. Decades-long assumptions about how advanced economies must operate are collapsing and, in the words of Yuan Yang MP, “political economy is back”. At a moment of political fragmentation and economic uncertainty, the Burnham government must offer a vision of social and economic transformation that delivers tangible results.
The postwar Labour governments that transformed Britain understood that economic security and civic pride go hand in hand. A youth jobs guarantee delivered through local government would embody that tradition. It would give a generation a route into work, improve neighbourhoods across the country, and demonstrate that the government can still act boldly to solve national problems.
Alan Milburn’s recent government-commissioned report on young people and work made for grim reading. More than one million young people are not in education, employment, or training (Neets), giving the UK one of the highest such rates in the developed world, and entry-level jobs and youth apprenticeships have both declined substantially in recent years. This is not a problem confined solely to postindustrial areas with high overall levels of poverty. Indeed, the eastern part of my hometown of Brighton and Hove has the sixth highest Neet rate for young people previously eligible for free school meals.
While Milburn estimates the annual cost of the youth unemployment crisis at a colossal £125bn, the long-term costs to mental health, social cohesion, and trust in our democratic system will be greater still – perhaps incalculable. The Labour movement has a political and moral obligation to start tackling this problem with radical solutions, and fast.
The government’s Youth Guarantee has shown some early promise, but the scale of the challenge demands a more ambitious and radical response. The government could rapidly rollout a new programme as part of this scheme: a local-authority youth jobs programme. Any 16-24 year-old out of work for 12 months would be guaranteed a job with their local authority, with the government directly reimbursing the full costs of employment.
Local authorities continue to face extreme financial difficulties after years of real-terms cuts under the Cameron governments and rising demand for services such as social care, children’s services and homelessness prevention. As resources have been squeezed, visible services such as grounds maintenance, street cleaning and leisure provision have often borne the brunt. A new, flexible workforce funded by central government could help reverse this decline.
Councils are experienced employers, and have the scale to take on a large number of additional workers in relatively short order. To benefit from the scheme, they would need to demonstrate that the jobs in question were truly “additional” rather than amounting to the replacement of existing employees. That risk could be further mitigated by limiting employment to a fixed term of 18 or 24 months. The Treasury could limit the total cost of the scheme by capping the overall number of jobs that could be taken, shared proportionately across councils. For example, 100,000 people employed at the baseline national paygrade (including pension costs) would be around £3.1bn annually – a fraction of the costs being incurred in the current crisis.
Crucially, this would not be the crude Keynesianism of digging holes and then filling them in again. There is almost unlimited work that local authorities desperately need to complete, but currently do not have the resources to undertake. Young people could refurbish playgrounds, remove graffiti, support homeless people, maintain parks, and repair street furniture. Local councils could determine which jobs were most needed in their areas.
This policy would be just as popular with Reform-leaning voters as it would with progressives, because the work being undertaken would make a material impact on the “look and feel” of people’s neighbourhoods and restore pride in local communities. Right-leaning voters would respond well to the basic premise: “do you want your taxpayer money being spent supporting young people who aren’t in work, or used to employ them in proper jobs that will improve your neighbourhood?”
Andy Burnham has made an exciting start to his premiership by promising a new political and economic model. A local authority youth jobs programme would be a tangible demonstration of this fresh approach.
