Movie City News (MCN) had an interview with director Ken Loach (KL) where they discuss the accents:
MCN: Were the actors in Sweet Sixteen using their own accents, or did you ask them to affect a working-class attitude?The other interesting thing is that the movie was rated R in the States and 18 in England and Wales mostly because of language. (In Scotland, it was rated 15.) The movie definitely has "adult themes" and drug trafficking (although no actual on-screen use), but there's no nudity and the violence is very understated. All things considered, I'd probably say it earned a PG-13 in the States, and a 15 under the British Board of Film Classification system.
KL: That was them, really. I wouldn't have wanted them to play it up or down, because it wouldn't be real.
MCN: Did you plan to add subtitles or was that someone else's idea?
KL: I wasn't surprised by the decision. Even in England, that dialect is difficult to grasp. It's quite tough. It was important to use it, though, because the dialect was so much a part of the characters. The humor, the energy of the language also is so much a part of the place.