There was much excitement surrounding last week's announcement of creating 'UK Central' - an integrated bundle of capital projects that would create a strategically vital transport nexus in the West Midlands, with ambitious housing and leisure developments.

This development hub would effectively involve long-term plans to further develop around the M42, as well as in and around Birmingham International Airport, the National Exhibition Centre and Coleshill.

Because there were predictions of 100,000 jobs being created and the potential of adding over £19billion to GDP through this scheme was bound to generate interest.

While UK Central is no bad thing - quite the contrary - the overall scheme is predicated on a number of very long-term assumptions, including the expansion of Birmingham Airport and the development of HS2.

But because full benefits would possibly not be experienced until 2040 this plan can hardly be viewed as creating an immediate solution to the problems we currently have here in the region.

One area which is most in need of assistance is North Solihull, particularly Chelmsley Wood. There new job creation opportunities would help alleviate the vicious cycle of poverty and lack of ambition afflicting young people who live there.

Indeed, on local radio I heard one local resident who stated that there is a desperate need for opportunities for the children leaving secondary school in the next couple of years.

Sadly, I fear, it could be many years before UK Central starts to create the jobs this person wants for the next generation.

The need to improve the lot of young people who end up out of work, so called 'NEETS' - those not in education, employment or training - has been identified as being a major concern by the OECD (Organisation for Economic Cooperation and Development).

In their report  Education at a Glance 2013 , the OECD shows that young people, defined as being between 15 and 29 years old, who, in this country, don't enter third level education (or drop out), fail to become part of a training scheme or are in employment can expect to be out of the labour market for an average of 2.3 years.

The comparable length for young people elsewhere is less; 1.1 years in Luxembourg and the Netherlands, 1.2 in Iceland, 1.3 in Norway and Switzerland and 1.7 in Germany and Australia.

Though the UK has the highest graduation rates in the developed world, we have a disproportionately high number of young people with no qualifications or experience in work; only Japan and Spain being in a worse position.

Such prolonged unemployment for young people as well as making them effectively unemployable because of their rapid loss of discipline and esteem, will increase social costs emanating from the spiral of decline in terms of aspiration which is then passed on to the next generation.

It is to be noted that health problems due to smoking and obesity are worse among the poor.

According to Andreas Schleicher, head of education at the OECD, such young people have become the primary 'victims' of austerity and makes the point that those countries which are most willing to invest heavily in vocational education are much more likely to get them into useful employment.

And according to Neil Carberry who is the CBI's director of employment and skills there is a need to end the dismissive view that has developed about technical education.

Indeed, Carberry makes the point that our lack of skills is 'critical' and undermining the potential for growth:


"UK competitiveness relies on a highly skilled workforce, so we cannot afford to waste talent."


George Osborne's announcement that the first tranche of money from the single pot which Lord Heseltine recommended in his report  No Stone Unturned  is to go to Greater Birmingham and Solihull Local Enterprise Partnership (GBSLEP) is great news for this area.

The trouble is, no effective spending will commence until 2015.

But youth joblessness is a problem which needs immediate attention as every day that goes by when this group continue to be out of work is one too many.

So George Osborne should urgently address youth unemployment.

The trouble is, everything we hear suggests that austerity is set to continue for many years ahead and that despite the belief that things are getting, marginally, better, we may have to wait until at least until the end of the decade before we see growth similar to that which existed before the global financial crisis began in 2008.

This is worrying as it means that a whole generation could have been lost.

Writing in  The Observer  Will Hutton makes the argument that we should expect urgent action from George Osborne.

As he points out, the years since the financial crisis began have been 'brutal' and by 2018 GDP will be some 16% less than a decade before and, apart from a privileged few, hardship is being felt in reduced income.

Hutton is among many commentators who believe that in the UK we have a country where there is an increasingly scarcity of jobs with decent salaries and prospects.

However, Hutton contends that it is the young who are worst affected:

"Between 2008 and 2012, the Institute of Fiscal Studies reports that average incomes for people in their 20s fell by 12% - the largest of any group. The reason is not hard to find: there has been a collapse in demand for their labour. Firms, fearful for their own future, are not offering first "entry" jobs on any scale, let alone promoting and giving opportunity to the young they do employ. A quarter of firms offer no entry jobs at all. One in five 16- to 24-year-olds is without work."


This is truly dreadful. For the record in the West Midlands the rate of joblessness for 16-24 year olds is 21.%, some 83,000 overall though in some areas the rate rises to well over one in four.

Given that the prospects for economic recovery remain pretty weak, the need for government intervention to attempt to avoid a 'lost generation' become even more pressing.

But, Hutton argues, there is little likelihood that George Osborne will do anything other than continue his savage cuts which are likely to add to the misery of all concerned but particularly the young.

For those who read Hutton regularly, there will be no surprise that he considers the cuts being made to be 'unnecessary and counterproductive' and that the amount that this country is shrinking the state by is unprecedented for any industrialised country. He cites the IMF report  Fiscal Adjustment in an Uncertain World  which shows that only three other countries have cut spending by a greater proportion than the UK; Iceland, Ireland and Greece.

All of these are small countries and, of course, Iceland is a special case in that it is isolated and not an EU member. The fact that it simply refused to 'cough up' to other countries for the debts its banks incurred certainly makes it an interesting case.

Ireland is recovering but having to rely on the return of its greatest export; its young people who are leaving in search of work in numbers not seen for decades.

Nobody surely would want us to become like Greece!

Fascinatingly Hutton cites data contained in  Fiscal Adjustment in an Uncertain World  to demonstrate his contention that our financial position is not as appalling as we have been led to believe.

Using table 12a Hutton points out that our financial position is, when taken from an overall perspective 'comfortingly sound'. Apparently the long-term requirements finance for health and pension are fine and 'total financing needs' to service all debt is 13% of GDP which is about half of the G7 countries.

Hutton believes that we have the 'best protected public debt position of any country in the world top 30' and, significantly, because only 30% of our debt is held by non-residents compared with the average of over half for most advanced countries, we are less likely to suffer a speculative attack.

He is strident in his view that we have been seduced to believe that unless we undergo the years of austerity to bring debt down we will be domed in the short-run and leave a terrible legacy to the next generation; he calls it 'hogwash' which is part of selective use of data to mount an 'ideological crusade against the state'.

Accordingly, Hutton is firmly among the camp which believes that Osborne has a great deal more ability to invest in expanding the economy that he claims is possible. Moreover, he contends, it is crucial, to ensure that increasing opportunities, especially through apprenticeships, for the young becomes a key priority by the Chancellor.

Here in the West Midlands we could do with the funding being funded on to develop opportunities in the sectors for which there is potential; most especially engineering and creativity.

Hutton makes the precise point the 'Future Jobs Fund' which was set up by the last government in 2009 to assist the most disenfranchised but cancelled by the coalition was more successful than it has been given credit for and should be considered as a priority by Osborne:


"...for a mere £6,500 subsidy per job, it created 105,000 for unemployed youngsters within the 18 months to March 2011. But society's benefit was £7,750 per person, estimated the Department of Work and Pensions."


Construction is another sector in which there is potential to create jobs.

The overall stock of housing provision could be increased for overall good and ensure that the next generation have decent homes at affordable prices because austerity has not made them sufficiently affordable for starting their career on average salaries.

This could be allied to apprenticeships to train school leavers in traditional trades.

Another report published last week by The Institution of Civil Engineers (ICE),  The State of the Nation, Transport 2013  recommends that this part of the construction sector is one that contributes to both short-term recovery and long-term economic development.

It is hardly surprising that the ICE should be advocating improvement and upgrading of the transport infrastructure. This is something that proponents of UK Central also believe is essential.

A separate briefing paper by the ICE on the West Midlands makes clear the importance of investment in an 'integrated' strategy for this region because of the fact it is at the heart of the road and rail network and that the ability for 'efficient and economic travel' has such an important impact in growth in every other region.

The chancellor's announcement concerning investment in infrastructure projects is, like the money to go to GBSLEP, very good news but tempered by the fact that they won't start for a couple of years.

What is really needed is that George Osborne should exercise choice to ensure immediate prospects for the jobless youth (as well as other unemployed) in this region.