By Max Clarke

‘Deep-seated’ structural problems are affecting the UK labour market that economic recovery alone will not address.

Problems, including pockets of long term unemployment and inactivity, high public sector dependency and serious skills shortages, are affecting large swathes of the UK and have been entrenched by a decade of economic growth.

This is according to the latest publication by prominent business organisation, the CBI (Confederation of British Industry), entitled Mapping the route to growth: rebalancing employment.

“The boom years before the recession masked the extent of deep-rooted problems in parts of the labour market, including long-term unemployment and an unhealthy dependency on the public sector,” commented CBI Director General, John Cridland. “These problems will not disappear with the economic recovery and left unchecked will have grave social and economic consequences.”

By mapping the state of the labour market region-by-region, the CBI’s analysis reveals that the decade of growth before the recession masked entrenched problems, including pockets of long-term unemployment and inactivity, high public sector dependency and serious skills shortages. The mapping was conducted by Esri UK using geographic information system technology.

Projections of future employment trends suggest these labour market divisions will deepen as the recovery continues, with highly-skilled jobs expected to be most in demand in London and the South East, compared with the North East and West Midlands.

“Only private sector growth can create the jobs we need and we must ensure the fruits of recovery are felt in every region,” continued Cridland. “We need to get the UK working and that is going to require fresh thinking and innovative solutions.”

Looking at the state of the labour market in more detail, there are currently 2.46 million unemployed people in the UK. The CBI expects this to continue rising through 2011, peaking around 2.6 million, before edging lower during 2012. However, the cyclical rise and fall in employment has hidden a deep-rooted problem of long-term unemployment and economic inactivity.


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