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Millions to be trapped in employment 'twilight zone', says LGA

An over-centralised employment and skills system is creating a 'lost generation' of unemployed or underemployed people, according to a report from the Local Government Association (LGA).

Within a decade, it predicted, eight million people would find themselves out of work or trapped in jobs for which they are overqualified.

As a result, UK productivity could slump by a quarter before 2022, leaving the Treasury with a potential tax revenue hole of £164 billion, it claimed.

It called for devolution of services, funding, training and employment skills schemes to a local level.

Official figures have revealed that 1.4 million people currently work in part-time jobs but would prefer to be in full-time employment.

Private research has found that two in five employers are paying higher starting salaries than a month ago in an effort to corner a shrinking pool of skilled employees.

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