We welcome the announcement by the Secretary of State for the Department for Digital, Culture, Media and Sport, of the release of £150m dormant assets funding in response to Covid-19.
The Youth Futures Foundation will deploy £10 million to launch an emergency levelling up fund for young people from the communities hit hardest by this crisis, including those from Black, Asian or Minority Ethnic groups. We will invest in the youth and employment ecosystem to ensure its survival and readiness to support young people into training and work.
This funding is a vital response to the UK experiencing the fastest increase in unemployment claims since the winter of 1947, with areas of disadvantage particularly hard hit.
- Youth unemployment rose from 5.4% in March to 8.6% in April and looks set to continue to climb rapidly*
- In May one third of 18-24 year olds had been furloughed or lost their main job**
- Over 1.35 million young people could find themselves unemployed this year***
Young people are critical to getting the economy re-started quickly and safely in the wake of Covid-19. They are adaptable and flexible in terms of skill acquisition and ability to relocate to find employment. They are, however, more vulnerable to economic downturns. In the previous recession, young people saw their unemployment rate grow three times faster than their older counterparts. In this recession, the impact on young people will be greater.
Young people are being hit by a perfect storm of weak demand in the economy and high competition for available jobs – particularly in ‘shut-down’ sectors. For those leaving education with low qualifications and/or little or no work experience there will be high barriers to finding that first employment opportunity. Over half of the pupils currently in Year 13 will not go onto higher education, they must now find a job without completing the academic year or having access to career advice.
There is clear evidence that young people who have repeated and/or long-term spells of unemployment are much more likely to be out of work later in life, to be in poor quality work and have lower earnings. There are also knock on effects for physical and mental health. The likely economic and fiscal cost of not intervening to protect young people from permanent labour market ‘scars’ will be significant and persistent.
The Youth Futures Foundation is committed to addressing this challenge to ensure young people from all walks of life have access to good quality jobs. We recognise that achieving this systemic change will be a team effort involving a broad range of employers, government, funders and organisations working with young people. We look forward to working in partnership to transform youth employment, starting with emergency funding for those most in need.
*Institute for Employment Studies **Resolution Foundation ***Pre-lockdown 750,000 young people were NEET (not in education, employment or training) in the UK. A further 600,000 young people could find themselves unemployed this year according to the Institute for Employment studies (IES) and Learning and Work Institute(LWI).