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Economic growth in the decade before the recession hid “deep-seated” labour market problems, which will not be fixed by the economic recovery alone, CBI research has revealed.
The report, Mapping the route to growth: rebalancing employment, found an entrenched “structural jobs deficit” characterised by pockets of long-term unemployment, high dependency on the public sector and serious skills shortages.
Patterns of unemployment were found to be “highly regional” rather than a simple north-south divide, according to the region by region mapping from Esri UK.
Urban areas, such as Teesside, Hull, Liverpool and South Wales, were found to have pockets of high unemployment, while areas with a local economy based around services or innovative technology had lower unemployment, like parts of Manchester and Edinburgh.
Regions with the strongest jobs growth during 2004 to 2007 saw employment levels plummet during the recession of 2008/09. The CBI said that this suggested job creation in these areas had been driven by a cyclical economic boom, rather than sustainable structural improvement in the job market.
Public sector dependency was found to be particularly high in Wales, parts of Scotland, Northern Ireland, the North East and Merseyside, which has implications for employment in those areas as the public sector makes huge budget cuts.
The research also predicted that the shift towards higher-level jobs that require a degree will accelerate. By 2017, 56 per cent more jobs will require people to hold graduate-level qualifications, while demand for people with no qualifications will fall by 12 per cent.
John Cridland, CBI director-general, said: “The government has rightly focused on tackling the structural deficit in the public finances, but needs to apply the same rigour to attacking the structural jobs deficit.
“Only private sector growth can create the jobs we need and we must ensure the fruits of recovery are felt in every region,” he said. “We need to get the UK working and that is going to require fresh thinking and innovative solutions.”
Commenting on regional variations in employment, Cridland said: “The answer is not bussing people to where the jobs are. We need to tackle the structural causes of unemployment, while doing all we can to get the private sector really motoring in all regions of the UK.”
Fascinating report findings - particularly the projections for the demand for graduate level qualifications