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Public sector cuts could reverse patterns of improved graduate retention in cities and regions outside of the South East, resulting in a ‘brain drain’ likely to impede economic recovery, according to a new report published yesterday by The Work Foundation.
 
The public sector has proportionally more young graduates than the private sector and with new graduate unemployment already at 20%, public sector cuts are likely to increase graduate unemployment in the short-term. On a longer term basis, this will result in a ‘flight’ of young graduates from public sector dependent places in the North to places with stronger private sectors in the South East.

Cutting the Apron Strings? The Clustering of Young Graduates and the Role of the Public Sector shows a ‘spreading out’ of young graduates (those aged between 20 and 29) over the past decade. Yorkshire and Humberside, the North East and the East Midlands have seen a proportional increase and cities such as Leeds, Sheffield and Rotherham have experienced large overall rises in young graduates. The evidence suggests this trend has been driven by increased public sector demand in the regions during the decade of public sector expansion from 1997.  

Young graduates in the North and the Midlands are now disproportionately employed in the public sector. This has serious implications for how the government chooses to handle public sector cuts.

Jonathan Wright, author of the report said, “The Coalition must demonstrate its commitment to rebalancing the economy. High skilled graduates are vital for urban innovation and growth. With the scrapping of schemes such as the Future Jobs Fund, the Coalition must now focus on developing strategies aimed at integrating the highly skilled into local private sector jobs.

“Earlier research has indicated that the growth potential of places in the South East far outweighs those in the North. The flight of young graduates due to public sector job losses in the regions would exacerbate this trend, disproportionately hindering economic recovery in the North and Midlands. This must be recognised and taken into account as the Coalition implements its cuts agenda over the next four years.”

Cutting the Apron Strings? shows a clear link between the location of young graduates and the proportion that are employed in the public sector. This relationship is stronger for young graduates employed in the ‘non ring-fenced’ public sector, which is the area where job losses are expected to be greatest.

Jonathan Wright added, “High skill levels have become vital to the success of city economies. The benefits extend beyond the highly skilled: both the wages and chances of employment of low skilled people are increasingly determined by their proximity to highly skilled workers. Initiatives must therefore be put in place for cities previously reliant on the public sector to retain graduates. Not doing so risks exacerbating regional divides between successful cities and regions (mainly located in the South East) and those in the North and Midlands.”  

Notes to editors

1. Cutting the Apron Strings? The Clustering of Young Graduates and the Role of the Public Sector by Jonathan Wright is available at www.theworkfoundation.com on publication and from the media team in advance.
2. Jonathan Wright is available for interviews and briefings.
3. The report is part of Cities 2020 research programme which is dedicated to looking at policy for successful cities in 2020. The programme is sponsored by HEFCE, Bristol City Council, fdf, the Department for Communities and Local Government and the University of Essex.
4. The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks. In October 2010, Lancaster University acquired The Work Foundation, forming a new alliance that will enable both organisations to further enhance their impact.                                                                                                                      
   
   Media enquiries: 
   
   Tom Phillips
   0207 976 3554 tphillips@theworkfoundation.com
   
   Nasreen Memon
   020 7976 3507 or 07825 527 036 nmemon@theworkfoundation.com