Thousands of new jobs coming on stream in Birmingham over the past seven years have done little to combat high levels of unemployment and social deprivation among people living in the city, a new study has found

While Birmingham has outstripped the rest of the West Midlands in creating employment, most new vacancies are filled by outsiders.

Many people living in Birmingham, particularly in inner city wards, lack the skills and academic qualifications required to take the jobs, according to the Regional Skills Assessment 2008.

Employment is being driven largely by growth in the public sector and service industries including hotels and catering.

But only two-thirds of economically active adults in Birmingham are in work – a figure that experts believe is bound to worsen as the recession bites.

For ethnic minority communities, worklessness rates are far higher.

Only 45 per cent of Pakistani and Bangladeshi adults have a job, while the figure is 56 per cent for Black Africans.

The skills report warns: “Many localities are affected by a cycle of social and economic deprivation, limited opportunities, low attainment and aspirations. Many wards are among the most deprived 20 per cent nationally in terms of young people’s and adults qualification attainment and school absences and staying on rates.

“Measures to address these problems will be important to both tackle social and economic disadvantage and to ensure that employers can access the skills they need to develop and grown in the future.

“Significant numbers of those within the workforce lack skills and qualifications, a particularly high proportion of workers in engineering and manufacturing have no qualifications and as a result are in a vulnerable position as employers shed lower skilled jobs and demand new and upgraded skills in an increasingly competitive marketplace.”

Birmingham City Council has tried to address the problem by offering specific skills training courses to fill both the temporary construction job vacancies and the permanent jobs created by projects such as the Bullring and refurbishment of New Street Station.

The skills assessment, by the West Midlands Regional Observatory, suggests that some progress is being made.

An experiment conducted by the Learning and Skills Council offered courses at an FE college to a group of unemployed West Midlands residents, a quarter of whom had been on benefits for five years and a third of who had never been in employment. After taking part, half moved off benefits and more than a third found paid employment.

School leavers in the West Midlands continue to be less well qualified than their counterparts in other regions.

In order to reach the average level for England, 2,000 more young people need to achieve five good GCSE passes a year and 96,000 working adults must achieve NVQ qualifications.

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