Currently 1 in 8 young people are NEET (not in education, employment or training), with many experiencing the scarring effects of being left out of opportunities to earn or learn long-term. These rates are the highest they have been in 8 years. Tackling this issue is key to delivering two of the Government’s five missions – kickstarting economic growth and breaking down barriers to opportunity. Research with PwC shows that if we lowered the NEET rate to a level comparable with the Netherlands, we could increase GDP by £69bn.
In this blog, our Heads of Policy Jacqui Shurlock and Vicki Jones consider relevant Government announcements since the election, as well as what to expect when Parliament returns from recess, spotlighting some of the Youth Futures evidence which could help inform real and sustained change in policy and practice.
Early government announcements
We were pleased to see several youth employment-related announcements from Ministers over the summer. There are also indications of an appetite for cross-departmental working, which is very welcome, as responsibility for policy and investment to address youth employment sits across a number of departments.
Skills
On 22 July the Prime Minister and Education Secretary launched Skills England and appointed Richard Pennycook, CBE, as the interim Chair. Skills England will provide strategic oversight of the post 16 skills strategy, bringing together central and local businesses, training providers and unions.
A Skills England Bill was announced in the King’s Speech, transferring the functions which currently enable employers to shape skills training from the Institute for Apprenticeships and Technical Education (IfATE) to Skills England. A critical function of this new public body will be to identify which training will be eligible for funding via the new growth and skills levy (a more flexible version of the current apprenticeship levy).
Youth Futures Foundation agrees that levy reform is vital – we’d like to see a future where at least 50% of funding is ringfenced for young people. Our primary concern is that apprenticeship participation – especially amongst our young people and in areas facing the greatest levels of deprivation – has reduced dramatically. The Youth Employment Toolkit suggests that apprenticeships are likely to have a high positive impact on youth employment outcomes, so we need to see young people, particularly those from marginalised communities, being able to access these opportunities if we are to transform their life chances and to reap the economic benefits of skills reform.
Our recent report in partnership with CIPD found that most employers believe apprenticeships should be primarily used to support young people entering the workforce. Insights from over 2,000 organisations showed positive interest from the business community in championing apprenticeships for young people. Over half of employers (60%) think that the primary purpose of apprenticeships should be supporting young people to enter the workplace, with just 15% saying it should be used to develop existing staff. As well as this, nine in ten (89%) employers back the recommendation of an Apprenticeship Guarantee for young people up to the age of 24, ensuring that a Level 2 or Level 3 apprenticeship place is available for every young person who wants one and meets the minimum entry requirements. The report calls for an Apprenticeship Guarantee for young people and for the levy to be transformed into a flexible skills levy, with at least 50% of funds going towards apprenticeships, primarily for young people, and the remainder going towards other forms of accredited training.
On 25 July the Education Secretary also announced a short review of the post-16 qualification reforms at level 3 and below, concluding before the end of the year.
Employment Support
On 23 July Liz Kendall delivered her first speech as Work & Pensions Secretary during a visit to Barnsley. She acknlowedged the high NEET rate and recognised mental health, lack of qualifications and regional inequalities as key drivers while setting out the government’s ambition for an 80% employment rate.
The Secretary of State announced an overhaul of Jobcentre Plus, bringing it together with the National Careers Service and introduced a new ‘youth guarantee’, offering training, an apprenticeship or help to find work for all young people aged 18-21. A new Labour Market advisory board will provide insight, ideas and challenges as reform is taken forward, chaired by Professor Paul Gregg.
Working alongside other Co-Chairs of the Youth Employment Group (YEG), Youth Futures asked all political parties prior to the election to sign up to a young person’s guarantee. Labour’s adoption of this youth guarantee is a welcome sign that Government attention to the issue of youth employment is moving in the right direction. The youth guarantee can act as a ‘golden thread’ running through the vision for the next five years of government, and we are pleased that it partially adopts the YEG’s set of proposals. We think there is additional opportunity to ensure join-up between the new Young Futures Hubs and existing DWP Youth Hubs, and to ensure that the age range is extended to encompass those aged 21 to 24, ensuring that those in this critical transition period do not fall out of the system.
Youth Hubs and Young Futures hubs
On 16 August, Home Secretary Yvette Cooper announced that the government will establish a unit dedicated to preventing violent crime among young people.
The “young futures” unit will include setting up open-access youth hubs and identifying those most at risk of being drawn into violence, exploitation, crime and anti-social behaviour. They will include youth workers, careers advisers and drop-in mental health support.
Join-up across initiatives in government is something we need to see much more of so that the support offered to young people makes sense. Recent research by Demos, supported by Youth Futures, explored the existing DWP Youth Employment Hubs programme concluding that this intervention has been a positive step in helping young people to secure training and employment and recommending national rollout and further strengthening for marginalised groups of young people. It also suggested that links between these hubs for over 18s and the new “Young Futures” hubs, alongside other government initiatives like careers hubs should be explored with potential for there to be an integrated stronger single front door offer for young people.
Employment Rights
On 14 August, Deputy Prime Minister Angela Rayner and Business Secretary Jonathan Reynolds hosted a meeting with business representatives and trade unions to discuss the government’s plan for workers’ rights.
The government says its Employment Rights Bill, likely to be published in the autumn, would ban the use of zero-hours contracts and end fire and rehire practices, making parental leave, sick pay and protection from unfair dismissal available from day one on the job, as well the same for flexible working. Youth Futures’ work with Regenerate on the Good Jobs project contains some useful learning for how stronger employment rights could make a real difference to marginalised young people.
We were pleased to see the draft Equality (Race and Disability) Bill included in the King’s Speech. The Labour Party manifesto indicated a focus on the right to equal pay for Black, Asian and other ethnic minority people, the right to equal pay for disabled people, protection against discrimination, and requirements for disability and ethnicity pay gap reporting for large employers. Earlier this year research by Youth Futures Foundation found that almost half of young people from an ethnic minority background face discrimination in both getting in and getting on at work. Whilst there is much we need to see employers directly take the lead on, Government setting a strong framework for action will be a crucial positive move.
Wages
On 30 July the Government announced that the Low Pay Commission (LPC) will factor the cost of living when deciding the rate of the Minimum Wage and Living Wage. It also announced it is taking the first steps towards making rates the same for everyone, regardless of age, by narrowing the gap between the National Minimum Wage, for 18–20-year-olds, and the National Living Wage.
Youth Futures is pleased that the cost of living will now be factored into setting the National Living Wage and the move to ensure the rate for 18-20-year-olds will align upwards with the adult rate.
We would also like to see the cost of living factored into the apprenticeship wage. It’s essential to ensure apprenticeship pathways are attractive and rewarding for young people to access and not a ‘low pay’ entry route.
Devolution
Integral to the announcements by the Secretary of State for Education and the Secretary of State for Work and Pensions are the Government’s plans for devolution. The Department for Education will simplify and devolve adult education budgets to mayoral combined authorities and mayors and localities will be empowered to take the lead to drive economic opportunity and work in partnership with businesses and colleges to deliver employment opportunities.
There is already positive energy from some Mayors on this issue. Andy Burnham has worked with education, business leaders and young people to design seven Manchester Baccalaureate gateways – each linked to a sector that is growing in Greater Manchester. Richard Parker, the West Midlands mayor, outlined that tackling youth unemployment is one of his priorities and pledged to work with businesses to create 20,000 new work experience placements, training placements and apprenticeships for young people.
Our flagship placed-based programme Connected Futures has been working to outline the importance of understanding place-based issues to enable better employment outcomes for young people. It has uncovered how key local data is and the current gaps that exist in the collection, dissemination and understanding of this data. Recently we have launched our Data Dashboard, which is a free online resource that helps bring together the most up-to-date statistics from a range of data sources to enable a better understanding of data relating to youth employment by local authority area.
Looking ahead to autumn and winter
We expect to see the early publication of the White Paper to Get Britain Working, setting out the detail of employment reforms as well as the introduction of the Skills England Bill and the Devolution Bill. Work will begin in earnest to establish Skills England and we will see the Labour Market Advisory Board begin work.
The autumn budget will be on 30 October, with the Prime Minister and Chancellor so far managing expectations about the limited funds available to take forward reforms. We will be submitting a budget representation to HM Treasury to feed in evidence of interventions that are making a difference to young people.
Youth Futures will continue to engage with Government to ensure youth employment stays high on the policy agenda. Our hope is that Government will be truly ambitious for all young people; we’d like to see it adopting the goal of having the lowest NEET rate in the OECD by 2050. Whilst ambitious, we can take confidence this is possible from countries like the Netherlands who, through focus and ambition have shown steady improvement over the last ten years and now have the lowest NEET rate in the OECD. It is vital that policy, practice and investment are based on sound evidence about what works. Youth Futures will continue to build the evidence base in this endeavor.
