Fewer jobs have been lost in this recession compared with previous downturns but young people and the over-50s are feeling the pain more than most. Is enough being done to help these groups find work?

You could be forgiven for thinking the UK employment market is a disaster judging by mounting job losses and workplace closures over the past few months. For those made redundant, it most certainly is. But Paul Gregg, professor of economics at Bristol University, reckons the most recent quarterly unemployment figures are "staggeringly good".

According to the Office for National Statistics (ONS) the number of people seeking work actually fell to 2.46 million in the three months to November 2009, the first quarterly fall since May 2008.

"This is the worst recession since the Depression, but we have stabilised employment at half the job losses there were in the two previous recessions," says Gregg. "That is pretty close to a miracle."

But try telling that to unemployed young people, who have been bearing the brunt of the recession. The most recent figures show the number of 16- to 24-year-olds out of work stands at 927,000.

Nigel Meager, director of the Institute for Employment Studies (IES), believes these figures may be slightly exaggerated. He says that more than a quarter of young people counted as jobless are in some form of full-time education or training, because the introduction of student loans and tuition fees has boosted the numbers of students looking for work.

If employment has stabilised it is partly due to companies holding on to staff through bad times in the expectation that things will get better. But many employees have had to accept reduced hours or pay cuts. ONS statistics indicate that between September and November 2009, there were more than one million employees and self-employed people working part-time because they could not find a full-time job.

If unemployment has steadied, it is good news. But Meager points out that it might mean employers have the capacity to cope with an expected upturn without recruiting. "Just as the fall in employment has been less severe than expected, so the improvement might be slow and low as the economy recovers," he says.

In last April's budget, the government announced plans for a guaranteed offer of work or training for every 18- to 24-year-old who has been out of work for 12 months. December's pre-budget report extended the scheme to those who have been jobless for six months. This will mean either sector-specific training, with young people offered placements in sectors such as hospitality and care, or assistance through the Future Jobs Fund, where employers and charitable groups bid for the provision of six-month, part-time work funded by the government.

A recent report, Getting Back on Track, by charity consultancy New Philanthropy Capital, says government schemes are not reaching young people most at risk—those not in employment, education or training, the so-called Neets. Figures from the Department for Children, Schools and Families show that from July to September last year almost one in five 16- to 24-year-olds were in this category—more than a million people.

John Copps, author of the report, says that of this million most are aged 18 to 24, which suggests the recession is hitting those recently out of education. But Copps believes the real problem is the four per cent of young people that have always been in this group.

"The recession-hit ones grab the headlines. But these are the ones that have been to university and don't have a job. When things pick up, they will sort themselves out," he says.

"Then there's the group let down by government services. This group costs a fortune if you don't do anything. They end up costing the NHS, the prison service and criminal justice system, and cause lost tax and benefit dependency. It's a big economic and humanitarian problem."

Gregg supports this view. "The real problem is where there is a failure to attach to regular, stable employment," he says. "For people who have this long exposure to unemployment, we observe them right through into their forties and fifties having lower earnings, long periods without work and ill health."

The mainstream system has failed Neets. They often have a lot of public money spent on them in terms of social workers, special educational needs and efforts to help them engage. But, Copps argues, charities are better placed to help them. Having reviewed the work of 10 charities working with young people, he found they were successful because of their ability to provide a flexible approach, often on a one-to-one basis.

"You don't want to go back into a system that's failed you," he says. "Organisations that provide something outside that system are a godsend. These people need intensive help in a different environment that gives them a break and that's what these charities can offer."

One such charity is Fairbridge (see below), which works with young people that other groups find difficult. It provides one-to-one support, education and challenging activities for unemployed youngsters across the UK. And its approach has proved successful. It claims that more than 70 per cent of those it works with gain a qualification or go on to further education, training or employment.

The Local Government Association (LGA) agrees that the national system is disjointed and doesn't focus on individual needs. It has called on the government to devolve some of the £1bn fund for training and employment schemes to local authorities.

"The best way to get people back into work is for decisions about employment and training to be taken at the local level," says LGA chairman Margaret Eaton.

But while much of the focus has been on helping young people, older workers—and in particular men over 50—have also been hit hard by unemployment in this recession. ONS figures show the number of jobless over-50s had risen to 385,000 in the three months to November 2009, a 30 per cent increase in a year, while the figure for those out of work for between six and 12 months rose 126 per cent.

Richard Exell, senior policy officer at the Trades Union Congress, says the government may be right to focus on young people but now is the time to address unemployment among older workers, too. He believes the main problem is the difficulty these people have once they've lost their job.

Jane Barmer, employability projects manager at Age Concern Training, explains: "Statistics show there is a massive difference in the rate by which people over 50 get re-employed," she says. "There are a few schemes, such as the New Deal 50 plus, but much of this help is disappearing. And although the recession has seen money ploughed back into employment initiatives, they are not specific to the over-50s."

Barmer believes that most of the current schemes don't help this group. "They don't understand the experience and transferable skills these people have. Even advisers in Jobcentre Plus think employers don't really want older workers."

Exell hopes that measures set out in the pre-budget report will help older people back to work. The chancellor, Alistair Darling, announced new support for the over-50s to ensure that more can move back into work faster. In addition, for those wishing to work after retirement, people aged 65 and over will qualify for working tax credits if they work at least 16 hours a week, rather than the 30 hours at present. But this won't happen until April 2011.

The consequences of someone over 50 never again finding work are huge, says Exell. "First, there is the human cost of people ending their career with a sense of failure. Then there is a huge extension of the period of your life when you're not living on wages or a salary. Many people have to draw pensions early and that reduces their pension. They've also got fewer years of contributing, which makes the pension even smaller," he says.

And there is also a loss to business. "Older workers are often the institutional memory of a company. They have strengths, such as judgement, that are easily lost and hard to replace," adds Exell.

Chris Ball, chairman of The Age and Employment Network, believes businesses have started to appreciate the experience older people can bring to the workplace. "We're beginning to see businesses hiring and holding on to older people, and recognising they have talent and that their experience and knowledge will be important when they come out of the recession," he says.

Barmer agrees, adding that companies must recognise the huge demographic shift in the UK. "The younger age group is shrinking while the older end is growing," she explains. "Thirty per cent of working age people in the UK are 50 or over and this is going to grow. If we don't make sure that these people get the opportunity to develop skills, the skills gap will grow."

From homeless hostel to the business world

A year ago Stephanie Thomas would have been classified as a Neet, not in employment, education or training. She was homeless and living in a hostel when a member of staff introduced her to Fairbridge, a charity that helps young people.

"I didn't want to go to college or university, which was the conventional route expected of me," explains Thomas, aged 24. "Fairbridge offers alternative learning, acceptable learning."

Over the past year, she has completed several of the charity's courses, including a Learn to Earn course, where she learnt to run her own market stall; a digital photography course; and Spirit, where she and a group stayed on a boat for six days in Scotland and sailed 125 miles.

"All of these courses have taught me to give things a go, to be bold, to give what I do my best effort," she says. "Fairbridge has helped me develop skills and confidence. It's helped me interact with people and given me the experience to do what I want to do."

The Learn to Earn course was particularly inspiring for Thomas, who is now trying to set up her own business, Elevate, selling fashion, art and jewellery made by local independent artisans from a stall in Camden Lock Market, north London.

"It's still in the test marketing stage, but I've got a few fashion designers I work with, a few artists and jewellery makers. I sell their stuff and we share the money," she explains.

Thomas says Fairbridge has given her the opportunity to demonstrate abilities to herself. "There's no way I ever thought I'd be sailing on a boat for six days. I was the only girl, but it was cool and it was a great experience scrubbing decks."

The experience has inspired Thomas to help others.
"My hopes for the future are to expand my company, to become a creative director working with different groups of people, encouraging them to gain success, money and exposure to their talents and abilities."