The number of long-term unemployed young people is likely to rise from the current 130,000 to 350,000 by the end of 2011.

The issue has reached critical point largely in northern cities such as Sunderland and Barnsley but Swindon and Hastings in the south have also been hit by worryingly large levels of youth unemployment.

IThe report says that to maximise its impact of the £1bn Future Jobs Fund (see earlier story) it must be targeted on those cities where high increases in long-term youth unemployment have been caused specifically by the recession.

The fund aims to create 150,000 new jobs during 2009-11 for long-term unemployed young people. This will help less than half the expected 350,000 young people due to be long-term unemployed by December 2011, according to the report.