LOW business confidence and a lack of hiring in the North of England will lead to a sharp rise in youth unemployment this summer, a think tank has warned.

The report by IPPR North, which comes just as young people leave school and university and begin to look for work, cautions that, unless targeted measures to help young people are introduced as a matter of urgency, the gap between the North and other regions in the numbers of young people not in education, employment or training (Neet) will continue to grow.

The report shows that the proportion of 16 to 24-year-olds not in education, employment or training (Neet) is highest in the North of England, at 19 per cent, compared to an England average of 16 per cent.

It adds that low business confidence is leading employers to maintain a hiring freeze across the North which is increasing the time people spend on unemployment- related benefits.

New analysis in the report reveals that nearly half (47 per cent) of those claiming Job Seekers Allowance in the North have been doing so for more than six months, with the average length of time that people are claiming benefits more than double what it was during the 2008-9 recession.

The report also reveals that, where vacancies exist, they are in low paid, insecure jobs and are either part-time, or are self employed people looking for work.

The decline of well-paid, secure work is causing households in the North-East to face the biggest squeeze on household budgets compared to other regions in the country, with household incomes falling by seven per cent in the past year.

IPPR North says measures introduced by the Government to tackle youth unemployment will be insufficient to absorb the extra young workers entering the labour market and there needs to be a targeted jobs guarantee to trigger a summer hiring spree in the North.

The report also recommends that the North should not lose out in forthcoming announcements on investment in transport and housing infrastructure.

Although such investments tend to deliver medium to longterm economic benefits, their short-term impact on jobs, supply chains and business confidence in the North of England could be significant.

Ed Cox, director of IPPR North, said: “There needs to be a joint effort to prevent a big spike in Neets numbers.

“Schools need to encourage their students to stay on where they can, colleges need to make extra efforts to recruit next year’s intake, public sector employers need to promote work experience schemes, but, above all, employers need to take on apprentices through the schemes available.”