Entering the next election the three main parties will all be following essentially the same strategy to confront the issue of swelling numbers of young people not in employment, education or training (NEETs as they have come to be called).

Entering the next election the three main parties will all be following essentially the same strategy to confront the issue of swelling numbers of young people not in employment, education or training (NEETs as they have come to be called).  ONS figures show that last year this group grew by over forty thousand people – roughly the population of Kings Lynn.  Considering that youth unemployment is certain to be one of the key challenges facing the government coming out of the next general election, there is an opportunity for the parties to stake their ground with more bold approaches to the policy response.  

With the overall youth unemployment rate currently standing at 14.8%, compared to 7.8% for the working population as a whole, it can be seen that the recession has hit young people the hardest.  However, encompassing everyone from 16-year-old school leavers to 24-year-old Masters graduates, the picture of youth unemployment is complex.  Recent ONS figures indicate that decreases in unemployment within the 16-18 year old group have been offset by a steady rise in unemployment among the 18-24 age group.  Both cohorts are now generally better qualified than their counterparts in the last recession; however there are vast skills and educational differences both between these groups, and on an individual level.

While being particularly vulnerable to changing labour market demand; young people are also disproportionately affected by periods of unemployment.  New research by David Bell and Danny Blanchflower, states that the scar of a period of unemployment can impact on health status, job satisfaction and wellbeing, and can lead to reduced wages throughout an individual’s lifetime.  More importantly, this scar is both more prevalent and deeper as a result of youth unemployment than it is as a result of a spell later in life.

While all of the political parties have acknowledged the need for higher priority to be afforded to tackling youth unemployment, none have proposed any radical changes to the current strategy, which involves three key steps.  First it will provide access to the opportunity of employment, education and training support within six months.  Second, it will include the provision for access to work experience or internships for those entering the labour market.  Finally it will entail some form of individual capacity building in terms of developing job application skills and personal mentoring.   Within this strategy are all the key ingredients for managing the transition from education- and welfare-to-work.  However, there are several areas where debate and innovative thinking could pay dividends.

In the short term, policy-makers most pressing concern should be to balance the negative effects of unemployment (lost time for developing experience and skills, for example) with a greater emphasis on meaningful – and paid – work experience and training.  While this approach is being followed by the current government, research at ippr north has found that some uptake of training is not having the desired effect on employment outcomes and that young people see employers as valuing on-the-job experience above continuing skills development.  

In this context, there is a case for debating the mainstreaming of responsive and innovative strategies such as the current Future Jobs Fund (FJF) programme.  The FJF provides structured, short-term, high-turnover positions where young people can gain skills and experience in the workplace without undermining older, permanent workers.  Securing a longer life-span for this fund could compliment current apprenticeships schemes and is a model that could be adapted to fit within broader economic policy.

To target the 18-24 cohort specifically, coupling this approach with the current Graduate Talent Pool model of skills matching graduates to internship vacancies could mean that individuals are given the chance to earn valuable, industry-specific experience.  This would be in line with recent proposals from organisations such as the Confederation of British Industry (CBI) to stimulate provision and uptake of apprenticeships, internships and skills development.  

In the context of the current financial crisis, and with pressures on public spending, our approach to spending needs to be creative in order to ensure the best return for our investment.  Open debate of the case for streamlining the current menu of youth unemployment, education and training benefits into a single state payment such as a ‘Youth Development Wage’  for NEET’s – based on enrolment on a scheme of added-value work experience and training – could be one way to produce more efficient and effective benefits system.  

Any policies that are initiated to deal with current labour market issues should ideally be designed to flow directly into longer-term efforts to improve the robustness of the youth cohort against future shocks.  Integrating such changes with the post-16 education system could mean that training, education and experience could be combined in a single, joined-up programme.  Research from ippr has found that a more personalised approach, as advocated by our Now It’s Personal report, would better respond to the skill supply of individuals and the demands of local labour markets.  Findings such as this could contribute to a re-evaluation of where – and when – training and employment support need to be provided.

Right now, youth unemployment policies must bridge the current gap in demand for workers; in the long term they can provide a more cohesive and individually responsive programme for personal development, to cushion the transition between full-time education and full-time work.  Furthermore, world-leading support for young people will form the basis for the economic success of the next generation, which in turn will need to support an ageing population. Options must be debated and agreed upon with care; nevertheless, both the current and ongoing issues around youth unemployment provide an opportunity for the parties to do something radical.