With fears growing of a 'lost generation', business leaders warn that more must be done to engage young people

AS STEVIE Kidd watched the scenes of chaos, looting and violence unfolding on television last week, he was disturbed but not surprised.

Having worked with kids from challenging backgrounds for years through his training firm KDS Group, he recognised many of the behavioural traits displayed by the rioters - some of whom were as young as seven. "They don't know what they want, they don't know what they are good at and they have no purpose," he says.

It's a story Kidd sees time and again through his programmes to help youngsters, who had previously believed the world of work was closed off to them, find and stay in jobs.

While unemployment can't alone be blamed for the lawlessness that gripped England during four days of terror last week, it's difficult to deny that Britain has a major crisis on its hands with one in five 18-24-year-olds out of work.

Young people have been the biggest victims of the economic crisis, with 16-24-year-olds representing 74 per cent of the unemployed. With talk turning to a second global recession, there are fears the country is at the start of a crisis which could have repercussions for years to come.

Youth unemployment has already reached record highs - it stands at 917,000 across the UK, a rate of 19.7 per cent - but economists expect it won't be long before it exceeds one million. In Scotland alone, joblessness among the young is estimated to cost a staggering 11.4 million a week in benefits and lost productivity.

Since the outbreak of the financial crisis, the government has been warned repeatedly that Britain is in danger of developing a "lost generation" of young people. Now it seems those fears have been realised and the CBI argues that youth unemployment is "the biggest long-term challenge posed by the post-recession labour market," according to a recent report from the employers' organisation.

"All evidence suggests that a failure to engage with the labour market early has a sustained scarring on individuals through their lives," it stated. It is due to publish a study in the autumn on how to get Britain back to work, including recommendations on the complex issue of helping school and university-leavers find their first job.However, while the recession and continued economic stagnation has exacerbated the problem, youth unemployment isn't a recent phenomenon. "Neets" - young people not in education, employment, or training - were troubling politicians long before the outbreak of the credit crunch and even before the recession one in five 16-17-year-olds were counted as belonging to this category.

Kidd believes the challenge Britain faces today with wayward youths is one that has been brewing for several decades. Unlike in previous generations where youngsters were sent down the mines, went to work at the docks or did factory work as soon as they came of age, he says career paths now are neither as obvious nor as structured as they were 30 or 40 years ago.

"There's been a massive shift since then" he says. Today Britain's biggest employer is the services industry - a broad-brush label for everything from accountants to retailers. Shop work is often short-term and low paid while the more lucrative services careers, such as the law, have high entry points, requiring qualifications that youngsters from more deprived areas don't easily achieve.

This can lead to a lack of direction and drive, particularly among those from poorer communities, according to Kidd.

A lack of appropriate role models is also a major issue compared to the 50s, 60s and 70s when most people's parents had grown up during the war and instilled in their children a strong work ethic.

Some out of work youngsters today are the offspring of people who have not worked themselves, Kidd says. The concept of hard work does not enter their psychology because their parents have set an example of living off benefits. Even if young people do want to work, they don't necessarily know how to go about it and don't get advice and support on what to expect once they are in the workplace. If you go to Easterhouse (in Glasgow] you can go and find probably 14 flats where nobody will be working."

Neil Carberry, director of employment affairs at the CBI, says Britain is at risk of becoming an unemployment jigsaw where areas of deprivation and joblessness deteriorate further while towns and cities with a strong record of attracting highly skilled industries continue to flourish. "One of the risks is the creation of workless communities where work is not only not widespread but it's not normal," he says.

The once prosperous Welsh mining town of Merthyr Tydfil hit the headlines in 2008 when it was crowned the "sick note capital of the UK" due to the high dependence on welfare in the area. But there are concerns this could happen in numerous locations across the UK - particularly in communities that used to survive on heavy industry 30 years ago and in which there are now no major or obvious employers.The CBI has identified a number of pockets across the UK where unemployment is way over the average rate of 7.7 per cent, such as North Ayrshire, Scarborough and Torridge in Devon.

Carberry says young people, not only in these communities but across the country, need greater support to make that delicate transition between school or further education and the workplace.

While young applicants may be cheaper, they often lose out to older candidates in a highly competitive jobs market as companies don't have the time or money to train newcomers. This is particularly true of small companies, says David Watt, head of the Institute of Directors in Scotland.

In choppy economic times, SMEs have to concentrate on getting their products out to the market quickly and efficiently and therefore look for a "safe pair of hands", he argues. "When small companies are struggling they don't have time to take on employees they have to train and develop and that's why young people don't get taken on in a recession."

This has been a key factor in Scotland's youth unemployment, Watt says, as more than 99 per cent of firms north of the Border are SMEs. "Because we are in an SME market it is also somewhat harder to find the jobs," he adds. "One company won't look for 20 people, it will be looking for just one or two."

But Watt believes that Scotland has let down many of its young people as it has failed to properly identify the industries of the future, and what skills will be required to fuel them. "Engineering is a good example of where our training has not kept up with demand. There are lots of young people who are training in some quite good degrees but who don't naturally fall into a job any more. Our forecasting hasn't been smart enough."

He also believes that society has developed a snobbish attitude to some of the businesses that have replaced traditional industries such as shipbuilding and the jute mills. He believes retail is a prime example - it's a major employer, can offer good career development paths and teaches young people key life skills in how to deal with suppliers, customers and colleagues. He points to some of the German supermarkets, such as Aldi and Lidl, that offer starting salaries way above the average pay packet plus the use of a car.

"The industries we have replaced them (the heavy industries] with we either don't value or don't understand - retail is a massive employer," Watt says.

The CBI is urging the government to reduce the bureaucracy around apprenticeships to encourage more employers to offer placements. Both Westminster and Holyrood have gone to great lengths to increase the number of apprenticeships and the new Scottish enterprise minister Fergus Ewing has taken on board the concerns over youth unemployment expressed by the various business groups. But the CBI says the paperwork to access funding streams for new apprentices can still prove a major barrier for businesses.

Jim Murphy, who heads the charity Rathbone in Scotland, is also concerned that as university places become more expensive and harder to come by, those students who would ordinarily have gone into further education will start chasing the sort of jobs and apprenticeships youngsters with lower skills would have gone into. "The kids who we deal with, who are furthest from the jobs market, are then further disadvantaged and displaced," he said.

But Murphy is adamant that the events of last week shouldn't result in a knee-jerk reaction and new initiatives to re-engage young people with the world of work. "Rather than creating new initiatives, it's about seeing how we can enhance the ones that are already working."

There are numerous organisations and charities doing good work in this area, not least the Prince's Trust and the Prince's Scottish Youth Business Trust, and Murphy is keen that such programmes become more widespread. Rathbone, for example, goes into schools as part of the Scottish Government's 16+ Learning Choices initiative, to help school-leavers understand where the opportunities are and how they can achieve some of their ambitions - particularly those who won't attend university. "Low skilled does not mean low ambition," he insists.

Kidd of KDS Group stresses that the earlier firms such as his own are able to reach children, the better. "When you get them at 16, it's too late as you have to change their mindsets," he says. "We're looking at changing families. It's to do with early intervention as far as I am concerned."

He comes across children who believe opportunities are automatically closed off to them, so they don't even want to try. "It's about changing the whole mindset at youth," he says.

Whether the high level of unemployment among Britain's young was one of the reasons behind last week's riots or not, business groups and charities warn a failure to prevent a "lost generation" will eventually harm us all - not least because the country will be missing out on the technological skills and know-how that much of the present workforce is lacking.

Watt concludes: "We are very concerned about this issue and how we are going to develop the workforce of the future if so many young people are not engaged."