London’s Square Mile job market is failing job seekers under 24

A report to be published this week warns of problems ahead if the City does not act soon to help create opportunities for London’s young unemployed.

The study, from the City of London Corporation, the municipal governing body, states that nearly one in five young Londoners is now unemployed. Even though the capital generates almost a quarter of the UK’s wealth, it has England’s third highest rate of unemployment among 16- to 24-year-olds.

The Guardian reports that the findings echo those in a report in December, published by the New Policy Institute, which revealed that unemployment in London is two-and-a-half times higher for 16- to 24-year-olds than for those aged 25-64.

The corporation’s report is expected to claim that a continued failure to harness the economic dynamism of the capital and create jobs will lead to further exclusion and disadvantage among the young.

Backed by senior figures from City businesses, voluntary groups and local authorities, the report will challenge businesses across the capital to do more to prevent young people “falling through the net”, and will claim that they face a growing skills gap in the years ahead unless the “disconnect” between their needs and the training given to the young jobless is bridged.

The lord mayor of London, Jeffrey Mountevans, has recently called for businesses to provide more mentoring, work-experience schemes and apprenticeships. But the report will make clear that there are significant barriers facing unemployed young people hoping to get on to such schemes.

Figures provided by the Sutton Trust show that it costs £926 a month for someone to undertake an unpaid internship – putting the positions out of reach of many families.

A spokesman for the corporation said: “We have a responsibility to create a more fair, inclusive and sustainable society. We also want businesses where responsibility is central to all their decisions, all their activities and all their workers at all levels.”

The City’s leading financial firms are regularly attacked for paying their executives massive bonuses while failing to invest in junior staff. Earlier this year Labour leader Jeremy Corbyn accused City bankers of treating ordinary workers like a “cash cow”.

Clare McNeil, associate director of work, families and security at the Institute for Public Policy Research, said 18% of young Londoners were unable to find work, compared with a national average of 15%, in part because London has a more competitive jobs market.

But she also said the capital was lagging when it came to providing workplace schemes. “In terms of apprenticeships, the capital performs quite poorly,” McNeil said. “There is a lower participation in apprenticeships by employers than elsewhere in the UK. And while nearly half of internships are based in London, research points to the fact that it does tend to be those who are better connected who get them.”

A failure to find jobs for the younger generation will store up a host of socioeconomic problems, she suggested. “The longer it takes you to get a foothold in the labour market, the more of an impact it has on your future earnings,” McNeil said.

“People in their 20s and 30s are not able to catch up with older generations in terms of their earnings potential, so there’s an economic impact. But there’s a wider social impact, too. Younger people will become more disengaged, and that has all sorts of societal implications. Many people have made the link between the London riots and high levels of youth unemployment.”