Birmingham is facing an unemployment crisis with potentially 143,000 on the dole in 13 years time if nothing is done.
There are plans to create 100,000 private sector jobs in the Greater Birmingham and Solihull LEP area by 2020, but this will not be enough to meet Birmingham’s future employment need and tackle widespread worklessness, it has emerged.
An inquiry into long-term unemployment in the city predicts that by 2025 Birmingham will see a gap between vacancies and those needing jobs of 143,000, and will need to create at least 127,000 if it is to rise above the national average for employment.
Currently 49,767, or 12 per cent of the workforce, are unemployed.
The new Labour administration running Birmingham City Council has set itself the task of improving employment, reducing deprivation and positioning Birmingham as the enterprise capital of the UK.
The problem is particularly acute in the inner city where long-term youth unemployment (those out of work for more than six months) is near 40 per cent.
The inquiry found that there have been problems with data sharing between agencies involved in work programmes and that the voluntary sector is struggling to get contracts and deliver training services.
It made four recommendations to help improve employment prospects – all of which have been accepted.
The report concluded that the LEP needed to commit a percentage of its Enterprise Zone receipts to dealing with the long-term unemployed and that there needed to be closer cooperation with the Department for Work and Pensions and third sector training providers on the issue.
Former regeneration scrutiny chairman Jerry Evans (Lib Dem, Springfield), who led the inquiry, said the council was receiving less funding to deal with worklessness issues. He stressed that although the city council could not create jobs, it could help create the environment for investment and growth.
It follows on from an earlier council review, “Supporting the Recovery”, which concluded the major weakness in the employment market is the low level of skills among long-term unemployed.
In response to that a follow-up inquiry into closing the skills gap has been set up to find what is needed to retain graduates and improve the education, career progression and employment prospects of the army of unemployed.
Coun Ian Cruise (Lab, Longbridge), who chairs the new economy and jobs committee and will lead the new review, said: “We will look at how the skills gap can be closed and talk to all the stakeholders, the skills funding agencies, trade unions, further education providers, universities, businesses and the voluntary sector.
“We will aim to identify where the skills need is greatest, and align it to the demand of employers.
He said major employers like Jaguar Land Rover will be able to contribute and urged to help sponsor or support training and there will be a look at the proposals for a new Birmingham Baccalaureate, still in its early stages, to be designed to train youngsters for the specific needs of the city economy.
But there was a word of warning that the recession could not be entirely blamed for the problem.
Coun Timothy Evans (Lab, Hodge Hill) said: “Unemployment is devastating for anyone, but for someone who has never had the discipline and purposefulness of work and be on the scrap heap for some time, to get back into work is really, really hard.
“I have worked with young people who are the children of unemployed who are themselves unemployed. It has an impact on us, through our welfare and health bill and on them, their relationships, their mental health, their parenting and aspirations in life.”
But he said this was an ongoing issue, adding: “We had a problem with NEET (not in education, employment and training) young people before this recession hit. Successive governments have not got to grips with this. We need to look at the causes.”