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Youth unemployment policy 2.0

Nye Cominetti

24 March 2014

The first part of this blog argued that the Government’s efforts to date at tackling youth unemployment have largely been ineffective. This blog assesses recent announcements  made by Nick Clegg (in a speech) and George Osborne (in the Budget) of new measures to address the crisis. Will  ‘youth unemployment policy 2.0’ be more effective?  

In September 2013 the Government asked Cabinet Secretary Jeremy Heywood to review policy on youth unemployment. (Critics said this was an admission of failure – but personally I prefer politicians to seek alternatives than to dogmatically adhere to failing policy). In a recent speech Clegg appeared to trail the recommendations of this review. In particular he made announcements on three fronts:

  • Careers advice: tougher guidance to be issued to schools, with Ofsted to assess
  • A UCAS system for non-university options, with information available on apprenticeships, traineeships, further education, internships and work experience
  • Changes to young people’s benefits: benefits to be removed for young people without basic Maths and English who refuse a course, work experience to be made available for all young people after 6 months unemployment, and 16 and 17 year olds to be given access to JobCentre services 

Then in last week’s Budget George Osborne made two announcements on apprenticeships: 

  • Subsidies to businesses. An extension to the apprenticeship grants for employers (AGE) scheme. This gives money to businesses taking on an apprentice for the first time, and the extension is worth £100m
  • Higher level apprenticeships. £20m for higher level apprenticeships 

I offer some thoughts on these announcements below:

Careers advice - Clegg said new guidance would be issued to schools on careers advice, with enhanced oversight from Ofsted. Careers advice is hugely important, and helps young people make informed decisions about what to do both in school (what subjects to take, what activities to become involved in) and afterwards (whether to undertake further study, what to study, what careers to pursue). Obviously, the higher the quality the careers advice in schools the better, so in a sense this announcement is welcome. 

However, it comes on the back of 2011 Education Act which ended local authorities’ responsibility to deliver a universal careers service and instead gave a watered down version of the same duty to schools. The Act requires schools to secure independent careers advice for their students, but without any additional funding the quality of provision has dropped. An Ofsted report found that only 1 in 5 schools were providing adequate information, advice and guidance.  The National Careers Service is available to young people, but for under-19s it only offers a telephone and internet service.  Evidence shows that young people, particularly those from disadvantaged backgrounds, need high quality face-to-face advice and guidance to support them to make informed decisions about their future. The 2011 Education Act therefore represented a set back, whatever the failings of the previous system. It is hard to see what will be achieved now by strengthening the requirements on schools without also funding them accordingly.

UCAS type system for non-university options – Clegg said that 16 year olds will ‘get the chance to sit down and search, via a single website, the full range of college courses, apprenticeships, traineeships and other work-based programmes on offer in your local area’ and that this site would be run by local authorities, who would be responsible for gathering the information to populate the site.

This seems a very good idea, and appears to have cross party support as well: at our recent skills conference Liam Byrne, Shadow Minister for Universities, Science and Skills, said Manchester (a Labour-run council) had this idea first. Whoever first had the idea, it is a good one! The options for a young person not going to university are bewildering, whereas picking a university and a degree to study are relatively straightforward. We know that the transition from school into work or further/vocational education is fraught with difficulty . Anything that puts young people in a more informed position and better able to navigate and understand the options available to them is to be welcomed.

Changes to benefits conditionality and support for young jobseekers.

Clegg announced three measures here – two carrots and one stick. 

  • Carrot 1: Clegg is proposing to allow 16 and 17 year olds access to the job search advice available in Job Centres. 16 and 17 year olds are currently unable to access these services because they are ineligible for job seekers’ allowance (because it is expected that they be supported by parents). This is a welcome step. If 16 and 17 year olds want to seek work rather than continue in education, they should be supported to do so. We have raised before the problem of young people’s disengagement from employment services, and this will address that. Although, given that the age of compulsory education is being raised to 18 in 2015 this move might soon be a little moot.
  • Carrot 2: Work experience for 18-21-year-olds on JSA for six months. Clegg said “For all young jobseekers, after 6 months out of work, your advisor will also help you get a work placement.” These words imply there is no conditionality attached, which is welcome. We have written before about the drawbacks of ‘workfare’ policies. Apart from any inherent unfairness, a 2008 review of workfare schemes for the DWP found ‘little evidence that workfare increases the likelihood of finding work’. The second carrot is also welcomed, then. Some young people will benefit from undergoing a period of work experience.
  • The stick: Clegg announced that young people who do not have level 2 at Maths and English (the equivalent of a grade C at GCSE) will lose their JSA unless they go on a course. This is the wrong approach. Young people with very low skills should of course be offered training. But the mandatory element is likely to be counter productive. The DWP’s own 2011 analysis of a pilot of mandatory training found no evidence of positive employment effects. Young people are unlikely to engage fully with learning they do not want to do, especially if they have had negative experiences of mainstream education (as is likely the case if they have made it to age 16 without basic Maths and English skills). Disappointingly, this is an approach that Labour appear to endorse, with Rachel Reeves, Labour’s Shadow Work and Pensions Secretary, announcing similar plans in January. Instead, training should be offered to young people, with the benefits explained, and not forced on them. Of course – an education system which is producing young people lacking basic skills should also be addressed.

    So to sum up, Clegg’s announcements contained some good ideas that will over time benefit young people – the UCAS system for non-University options in particular stands out. And Clegg is right that careers advice must improve, though without funding it is hard to see how schools will achieve this.

    Short term versus long term

    What is notable about the Government’s recent announcements is that none of them are short term – in the sense of providing an immediate and significant boost to young people’s employment prospects. The only such policy was the Youth Contract’s wage incentives but the failure of this programme and the fact that youth unemployment figures are inching down seems to have deterred the Government from trying anything similar. This is to be lamented, because youth unemployment is a problem worth spending money on in the short term. Unemployment can have long-term consequences on young people, on their future earnings and employment, and (if we are thinking in Treasury terms) on their contribution to the UK economy. Instead, it seems the Government will hope that continued economic growth will slowly return the youth unemployment figures to pre-recessionary levels.

    The danger with that approach is that the country had a youth unemployment problem before the recession. Youth unemployment numbers (especially long-term youth unemployment) were going up even as the economy was growing strongly, from roughly 2004. There is therefore a structural component to the UK’s youth unemployment problem which economic growth alone will not address. Some of the Government’s decisions do begin to tackle some of these deeper problems. So while more should have been done in the short term – not scrapping the effective Future Jobs Fund would have been a start – such changes are to be welcomed. In particular, the idea for a UCAS system for vocational and further education is an important recognition that options for young people not going to University are too complicated.

    If the Government is in the mood to make further inroads into the structural youth unemployment problem, we would recommend proper funding for careers advice (effectively a reversal of the relevant parts of the 2011 Education Act), further reform of the apprenticeships system to improve quality, and support for those young people who cannot to travel to work, or for whom transport is unavailable.