Setting the global pace for ‘eradicating’ youth unemployment

Following the Prime Minister’s announcement committing to “eradicate inactivity and unemployment for our young people”, Youth Futures Foundation CEO Barry Fletcher proposes how the Government can achieve this ambitious objective in this blog post

As the What Works Centre for youth employment, our vision is for a society where every young person can achieve good work. The Prime Minister’s commitment in his conference speech this week to “eradicate inactivity and unemployment for our young people – once and for all” therefore was certainly welcome. 

An ambitious goal is essential for addressing any major societal issue; and our unemployment and inactivity ‘issue’ is a long-term and complex problem that has been worsening over recent years. 

Youth unemployment and inactivity in the UK today

Our 2024 Youth Employment Outlook highlighted how the UK has seen a slower improvement in reducing the number of young people not in education employment and training (NEET) compared to our OECD counterparts. Today, 872,000 young people are currently NEET, which accounts for one in eight 16–24-Year-olds [1].

This current rate of young people not earning or learning – at 12.2% – is the highest it has been for eight years. The fact that the lowest rate achieved in the UK in the last 20 years is 9.5% only highlights the scale of the challenge.

What should the Government’s goal be? 

A certain level of young people not earning or learning, especially for short periods, would be expected and inevitable even in the most well-functioning economy. For instance, young people are classified as NEET if they are on a gap year or actively looking for a job after studying with the expectation of moving into work soon.

The real challenge lies first in minimising the number of young people who become unemployed or inactive in the first place. Next, it is stopping them remaining out of work or education for an extended period, certainly beyond several months, at which point the longer-term negative impacts on health and wealth increase. 

Youth Futures has been defining some world leading measures that we believe the UK should pursue. The ‘north star’ goal we’d like to see adopted is for us to have the highest participation rate in education and employment across the OECD for young people.   

At present, the Netherlands leads the way with 95.6% of young people in education, employment, and training, compared to 87.8% in the UK [2] [3]. And it’s not just the figure that is impressive, it is the speed at which they have been able to improve over the last two decades through a dedicated public policy focus. If we could match the Dutch, approximately 500,000 more of our young people would be in work or education, which would be worth a long-term boost to the UK’s economy of £69bn. 

While ambitious, this goal is achievable in the UK, but only if it is seen as a long-term aim with sustainable focus and effort, including fundamental reform to our education, skills, and employment systems. So, just like in the case of Net Zero, we should aim to become the best in the OECD by 2050, with a clear and transparent trajectory of improvement over the next 25 years. Setting this goal would mean that the generation born today would transition from being young into a system that truly works and enables them to access good work. 

The foundations of a roadmap for change 

Whilst the challenge is complex and solutions are neither simple nor straightforward, there are key starting points that build on the best evidence base and international exemplars. We would highlight five: 

1. Apprenticeships are one of the strongest evidenced interventions in supporting young people into good work, yet the number of under 19s doing them has dropped by 41%. As we recently called for with the CIPD, a sensible and sizeable start would be reforming the Apprenticeship Levy to guarantee at least 50% of opportunities for young people. Data shows employers are supportive of this, which should give the Government confidence to consider it seriously. 
2. Early intervention for those at risk of falling out of work or education, and more help with transition from education to work. Our trialling of new interventions such as Building Futures will increase our understanding of what really makes a difference in this area, and help to inform better policy solutions.
3. More support for those facing additional barriers. We need a system that gives every young person a fair opportunity to fulfil their ambitions. This means focusing more help and investment for disabled young people, young people with experience of the care system and those facing discrimination.
4. Mental health is both a cause and consequence of youth unemployment and we will not deliver on the Prime Minister’s ambitious goal if we don’t provide more and better support to address youth mental health. It’s now one of the leading reasons why young people are not earning or learning.
5. Joined-up policy around the young person. Early policy signs from the Government are positive here. The Prime Minister referenced the Youth Guarantee as the ‘first step’ towards delivering this aim. This is a policy the Youth Employment Group, which we co-Chair, has been proposing as a critical way we can address the major challenge of young people outside of employment or education. We’re also encouraged by the direction of travel on Young Futures Hubs, curriculum reform and the role of Skills England. We see positive energy and will; our hope is that this wraps around young people, particularly the most marginalised, in a way that makes sense for them and follows the evidence.

Backing ambition and staying the course 

Change starts with ambition, so we welcome the Prime Minister’s big commitment to ensure the lives of young people are not blighted by the lack of a job. We have an opportunity to set the pace for the world in putting young people front and centre of a joined-up education, skills, and employment change agenda.

This change will be neither straightforward nor immediate; it will take courage, steadfast commitment from government, with buy-in from business and civil society, to deliver a plan and roadmap. In a tight fiscal environment, it will also need every penny and pound to work hard, informed by evidence of what works. But it can be done, and Youth Futures stands eager to continue our work with Government, partners, stakeholders, and, most importantly, young people themselves, to enable this ambition to be a reality.

[1] As the What Works centre for youth employment, we use NEET rates for 16-24 year olds as the best measure of those who are neither in education or training and not in work. Those not in work are either unemployed (i.e. seeking work) or economically inactive (i.e. not currently seeking work).

[2] https://youthfuturesfoundation.org/wp-content/uploads/2024/08/Youth-Employment-2024-Outlook.pdf

[3] Note on international comparisons: UK figures relate to the age group 16-24 unless otherwise stated. OECD figures relate to the age group 20-24, so UK figures quoted in the context of the OECD may differ from domestic figures.