Increasing the proportion of 16- to 18-year-olds in vocational education would reduce youth unemployment, according to a new report by City & Guilds.

The report, which looks at the economic benefits of investment in vocational education and training in the UK, US and India, argues that a 10 percentage point increase in the proportion of 16- to 18-year-olds in vocational education could lead to a 1.5 percentage point reduction in youth unemployment rates.

It also states that increasing the overall skill level of the UK workforce over the next decade could boost the UK economy by up to £163 billion.

The report states that in order to achieve higher productivity, countries need to increase the number of people taking both high and intermediate-level vocational qualifications, and not prioritise one over the other.

It also says that apprenticeships will give a return of between £16 and £21 for every £1 invested by government - and, on average, the net annual business benefit of a training apprentice is £1,500 a year.

Between 2010 and 2011, the UK government invested £1.2 billion into apprenticeships and it has set a target of creating 3 million apprenticeships in the next five years.

Chris Jones, chief executive of the City & Guilds Group, said: “This report shows that given the high returns, investing in professional and technical education is a safe bet for individuals, employers and economies. It helps to fill skills gaps, boost productivity, enhance industries and increase employment.

“In the UK government’s comprehensive spending review, we saw an encouraging commitment to professional and technical education. Maintaining this commitment and building on it will be critical to solve the nation’s skills shortages and help our economy grow.”

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