By Daniel Hunter

Record numbers of university leavers are failing to find work with almost half still looking for a job three months after graduating, local government leaders are warning.

As students gear up for the beginning of the new academic year, new research by the Local Government Association, which represents more than 370 councils across England and Wales, shows the number of graduates out of work has reached an all time high — with just 51 per cent in full time employment in 2010, a steady decline from 57 per cent in 2003.

It also shows that graduate under-employment is on the increase, with the number of university leavers going into part-time employment increasing from seven per cent in 2003 to 11 per cent in 2010.

But there is huge variation in graduate employment levels across the country with some areas seeing around one in three (36%) graduates in full-time employment while two in three graduates (60%) are in work in other parts of the country. This reflects variable job opportunities in different towns and cities across the country.

Of the 20 local authority areas with the lowest proportion of graduates in full-time employment, 17 are in London. This is, in part, because London has a higher proportion of highly skilled jobs than other places and attracts a higher proportion of graduates looking for work.

However, a handful of areas are bucking the downward trend with Bolton, Wakefield, Telford and Wrekin, and Herefordshire all showing a small increase in the number of graduates in full-time employment since 2007.

This is because England is made up of different local economies, which provide different challenges and opportunities for graduates. For example, while 34 per cent of jobs in London were in the highest skilled group, only 23 per cent of jobs in the North East were highly skilled.

The LGA is calling for:

- Government to give councils and employers greater powers so they can match skills training with jobs available in local labour markets
- Universities to work with councils so all students are offered robust careers advice in their final year — including information on job opportunities available where they choose to live

"These figures are particularly worrying at a time when thousands of young people are gearing up to go off to university with the hope of improving their job prospects," Cllr Peter Box, Chairman of the LGA's Economy and Transport Board, said.

"But it's not all doom and gloom, some places are seeing graduate employment levels increase in line with the different job opportunities local economies are able to offer.

"Councils and employers best understand their local labour markets, and we want to work with universities to ensure graduates are not only equipped to take local jobs but that we are able harness their talent to drive growth in our economies. We need to ensure that the skills people have make a better match with the jobs that are being created in a local area.

"Failure to get this right is not only disastrous for young people, but for taxpayers too. Young people who are trying to get on the career ladder are instead finding themselves without a job and potentially falling into long term unemployment. This can have scarring effects that last a lifetime and have a huge cost to the taxpayer in welfare and benefits."

The LGA is calling on government to give councils and employers greater powers so they can match skills training with jobs available in local labour markets. Local adult skills budgets are not sufficiently targeted towards employment opportunities in an area, with significant skills mismatches existing across the country.

Funding is being more effectively targeted in places where councils have been given some greater powers. In Bristol — as part of the City deals programme — local councils, the business community and the local enterprise partnership will have more control over £114million of skills funding to ensure it is matched to where employer demand is. Last week they agreed an employability manifesto to target young people with the right job skills.

Similarly, the Leeds City Region aims to use new powers over the skills and apprenticeship system to hit its target of reducing the number of 16-24 year olds not in education, employment or training to zero.

The LGA is also calling on universities to look towards local labour markets as well as national and international opportunities, and is seeking to support partnerships between councils and businesses to equip graduates with the skills and experience needed to take jobs and drive growth in local economies.

Council leaders now want universities to work with them to ensure all students are offered robust careers advice in their final year, which includes information on the opportunities available locally. London's experience, of having many high skilled jobs and high graduate unemployment, underlines the need for graduates to understand opportunities available in local labour markets.

Despite a 28 per cent funding cut to local government many councils are already working with universities to link graduates with employment opportunities.

Join us on
Follow @freshbusiness