Holiday resorts - and not inner cities - were identified last week as centres of low ambition and limited opportunity. Beyond the beach, Weymouth is a place beset by low wages, lack of transport, isolation and poverty of aspiration

On a sunny June day, Weymouth's esplanade is in full British seaside resort swing. Two hot donkeys sashay along the beach carrying their small, squealing passengers, and there is a long queue outside Rossi's ice cream parlour. A "wonderful place – wonderful – a great salt sheening sea bending into the land like a bow", wrote Thomas Hardy, who lived here.

The townhouse hotels and B&Bs on the faded Georgian seafront are doing a decent trade and the harbour is picturesque with its boats and bars. But immediately behind the seafront the gift shops and cafes are interspersed with betting and pawn shops and overhung with To Let signs. Deeper into the town and the Littlemoor housing estate is among the most deprived in Europe, directly butted up against the more affluent Preston.

Office for National Statistics figures released on Friday show schoolchildren in coastal towns falling dramatically behind their counterparts in the inner cities in terms of GCSE results, echoing the comments last week by the chief inspector of schools, Sir Michael Wilshaw, that aspiration and achievement was now a major issue in seaside towns.

Equality watchdogs including Alan Milburn's Social Mobility and Child Poverty Commission are also issuing dire warnings that a lack of immigration and investment, as well as the growing wealth gap and the dominance of London as an economic hub, are creating a crisis.

Weymouth's mounting problems are replicated around the country's coastline, from Cornwall to Norfolk and beyond, where often affluent facades mask poverty and stagnation.

"Enter this part of Dorset and you leave the 21st century behind. If you are interested in culture or remotely artistic, this is a wasteland," says Charlotte Storey, former actress and teacher, who runs Aspire, a successful small charity helping young people find their way into further education and employment.

"It's a generation behind. A prison of passion, a graveyard of ambition. My advice to young people would be go east, get out. People think 'oh, wealthy Dorset', and parts of it are, but behind that, behind the honey-coloured cottages that are the second homes of the Londoners, there is mass deprivation.

"Weymouth has the highest rates of teenage pregnancies in the country. Drug use is rife. If you're a young person, you leave school and you can maybe get work from June to September, but that's it. The average income around here is £12,000 to £15,000."

Unemployment is at less than 3%, but half of those in work have part-time jobs and previous UK-wide studies suggest many people in part-time work would like to get full-time jobs.

Just over 21% of Weymouth's adult population need benefits to help with housing costs. Almost a quarter of households have no car and locals complain the bus services have been cut to the bone. "Young people who want to go to college can't get there because of the buses. They drop out," says Storey. "They don't sign on the dole because you have to get into the dole office in the major towns and they use up all their jobseekers' allowance on the bus fares and if you're late you get your payment suspended for six months. So what is the point? They are off the radar.

"There was a scheme run briefly to loan scooters to get kids to college, but they weren't allowing enough petrol and were breaking down halfway home. It was ludicrously bad. If we gave the bus passes that so many wealthier pensioners have and don't use to these young people, we could really make a difference.

"There are so many schemes jumping on the funding bandwagon but not actually helping. You can go in Weymouth and there are probably dozens of organisations who will help with your CV and pass you on," she adds. "And that's worth around £200 to that agency but has done nothing to tackle the root cause of why you can't get a job.

"That duplication of services is a scandal. There's so much money being made in passing these young people around but achieving nothing. You could rub out most of them and set up some services that actually see the job through with a young person.

"The rural isolation and low wages mean schools can't get the great teachers, the expectations of parents are so low, or non-existent. There is no motorway, the train to London is expensive and take three hours; many of the young people I've worked with have never been. This part of Dorset is locked in on itself."

These views are familiar to Rob Jones, deputy principal of Weymouth College. The college has been hauling itself back from the brink and working hard to forge links with local industry and employers. Its exam results and retention rates for students are impressively high despite all the challenges and he roundly disputes that his students have no aspiration.

"This is a beautiful place to live, but it has its challenges. Transport is a big issue – we try to run as many minibuses as we can – and we'd like to have outreach provision in the more deprived areas like Littlemoor and Portland.

"But I'd be lying if I didn't say it's hard, with further education being enormously financially squeezed year on year, and I've given up complaining about the lack of decent careers advice available for young people. But we can't afford to sit back and moan, we have to get on and do the very best we can.

"And that means engaging with local employers, and we're starting more apprenticeships every year, getting students employability skills as well as qualifications. Helping them understand what is out there and what they can do," he says. "For example, we have a nuclear testing facility up the road here being decommissioned. Students were sceptical about that offering any career opportunities, but they came in and pointed out that decommissioning is a new industry in itself – it's happening here, Canada, France – so they would have a portable skill, a saleable asset. They hadn't seen it that way.

"In September, the chef Mark Hix is opening a Hix Academy here, so we're taking a standard catering course and making it something special. We're putting in as much effort as we possibly can to position ourselves as an inclusive but high-performing college at the heart of a community."

One of the UK's first seaside resorts, made fashionable by the patronage of George III from 1789 to 1805 and made fiction by Hardy at the turn of the 20th century – he renamed the town Budmouth Regis – Weymouth was once a thriving port town where merchants made fortunes from the nearby Portland quarries.

Local author Sean Geraghty has written about a Dorset as deeply ingrained with poverty and social inequality as it was in Hardy's day. His latest book is The Borassic Coast, a play on the area's tourism brand, "the Jurassic coast", and the rhyming slang for being broke.

Geraghty lives in nearby Bridport. He says he has known people move to the area from London to give their children the "idyllic Farrow and Ball-coloured life" only to move back. "They think their kids won't be so streetwise as in the city, and then they realise how rife heroin is and they are off back to the urban environment where their kids can be safe.

"But for young people from here, London is a far-off principality that they have no hope or desire to get to. This is a hinterland – no buses, empty homes, polarised between rich and poor, feudal communities.

"You can barely get a mobile signal, never mind broadband. In the 80s the village schools closed down, in the 90s we lost things like cricket grounds, then it was the shops and petrol stations that went. Now it's the buses. We're knee-deep in weekend dog walkers, but nothing else."

On Weymouth seafront, in the town's pavilion – which is itself threatened with closure and being run by volunteers – a group of travel and tourism students from Weymouth College have been putting on a charity fundraiser as part of their coursework – a seaside traditional day of bingo and a talent show.

They are far from lacking in ambition and most already have part-time jobs. Of the 25 on the course, six will go to university next year.

Asked if they intend to stay in Weymouth, Tuesday Hilton, 20, and Shona Tett, 18, look horrified. "God, no. I'm going to London," says Tett. "There's no jobs here and it's a bit grim. There's nothing to do. I've got a part-time job, but I have to get one bus for half an hour and then walk for half an hour to get there. A lot of my schoolfriends are staying; they are just happy like that."

Her friend Georgina Pope, 18, is one. "I like it here," she says. "I like my creature comforts. I know a lot of people who can't get a job, but I've got a part-time job. It is hard to find full-time work and the bus fares are high, you go to work and half the money is gone on the bus. But I do love it. I'm from here, why would I leave?"