The interim report of Alan Milburn’s report on Young People and Work does not make recommendations to government.
For those, we must wait for the final report due later this year.
The interim report focuses on the evidence – both in terms of the available data, and the words of young people themselves, about the increasing problems those aged 16-24 face in finding their way to meaningful employment.
NEET by the numbers
There are around 1 million young people not in education, employment, or training (NEET). This represents around 12.5 per cent of the 16-24 age group. In historic terms this is not unusual – the NEET proportion has dropped below 10 per cent only once in the past 25 years, with a recent peak being 16.9 per cent in 2012.
Six in ten of these young people have never had a job, up from four in ten in 2005. Among 24 year olds, 45 per cent of NEETs have never held a job – and this early experience of worklessness means they are likely to experience a lifetime earnings detriment of around £300,000. And the costs are not just personal – the report estimates that the cost of NEETs to the country is in the region of £125bn.
The proportion of NEETs who cite a work-limiting health condition as a reason for their status has risen by 70 per cent – and four in ten of these say that mental health is their primary condition.
Cohorts at particular risk of becoming NEETs are care leavers, carers, young mothers, and young offenders. It is possible to identify a wider range of risk factors too: you are more likely to become NEET if you have special educational needs, if your parent is unemployed, if you were raised in a single parent household, if your home is rented – all of which combine to make you far more likely to be NEET if you have experienced disadvantage.
NEETs and the sector
Plenty of NEETs have qualifications. Thirty percent achieved good GCSE grades or equivalent, more than one in five have a Level 3 qualification, while 15 per cent have a degree. That a degree is no longer (if, indeed it ever was) a guarantee of avoiding economic inactivity has dominated coverage – it is perhaps more notable that people with higher education qualifications tend (57 per cent) to be NEET for less than a year. Among those with no qualifications, just 16 per cent are NEET for less than a year.
The widely-trailed comments on higher education as a default route are there, but caveated with a recognition that graduates remain more likely to be employed, more likely to be in highly skilled work, and likely to earn more than their non-graduate peers. This, of course, is not necessarily a permanent state of affairs – some provision in the higher education sector offers lower rates of completion, and poorer opportunities for those who do complete. And there is a regional issue too – graduate earnings premiums are solid in London and the South East, but are beginning to fall elsewhere.
Milburn notes that:
there is a particular fault line in the broader system where the numbers in higher education and access to student loans are currently uncapped whereas the number of places in further education colleges are more rigorously controlled and typically funded at much lower rates
An infrastructure issue
Rather concerningly, there are about 314,000 18-24 year olds that are NEET and not in receipt of benefits. Information on this cohort is sparse, but many are looking for work or waiting to start a job or course. This is a significant proportion of the wider population of NEETs, and it is not hard to see the existence of a “hidden NEET population” as something that will inform the way Milburn sets out his recommendations.
He’s pretty clear that “there is no system in Britain that takes young people from education into work as adults.” Instead, he describes an incoherent set of programmes and institutions that attempt to support economic participation. This “confused” system – at a national and local level – is needlessly complex, poorly funded, and poorly articulated: he is particularly scathing on data not being shared between services. And even interventions that do appear to work tend to be time limited – responses to crises that are quietly dismantled once the moment passes.
Somewhere between the various parts of the education system, the NHS, the welfare system, social work, and the job centre young people are getting lost. Systems are organised by function and age, rather than aligned around a clear goal of sustained participation in education, training, or work. Beyond the age of 18 there is no universal statutory duty to track and support young adults who are not participating. What does exist is patchy, variable in quality and scope, and increasingly locally orientated.
The broken shock absorber
It is not hard to imagine a set of recommendations that focus on data sharing and infrastructure. However the ramifications are broader than reorganising publicly-funded support. It is refreshing to see a proper analysis of the demand side.
Section 3 of the report deals in some detail with the changing employment market for young people. Just 50 per cent of young people are currently in work, down from 63 per cent at the turn of the century. Over the same period employment among older people (those aged 25-64) rose from 74 to 80 per cent. The obvious answer might be that more young people are in education – but the proportion of those in full-time education who are also in work has halved: from 40 per cent at the turn of the century to just 19 per cent now.
Milburn describes post-compulsory education as a “shock absorber” – historically, when the jobs market has tightened participation in education rose. This happened after the 2008 financial crisis. It is not happening now.
A narrow first rung
There is little evidence for a lack of jobs, and the report diagnoses that the mechanisms used to bring young people into work are failing. It is harder to get a first job – the decline of the Saturday job (in retail or hospitality), and the reprofiling of apprenticeship opportunities away from young people mean that the “first rung” is thinner and harder to grasp. There are less employers in the sector that have traditionally employed young people, and the jobs that are available are more complex and more demanding: or are platform or gig work that rarely offers progression, contacts, or even training.
A growing graduate population is competing for jobs that have traditionally been done by people without degrees: a part of this is a growing complexity (there are one million less mid- and lower-skilled jobs than 20 years ago, while there are 6.3 million more highly-skilled jobs) that graduates are simply better prepared for. The way you apply for first jobs has changed too – once managed by an informal approach or family contacts, the process is now multi-stage and online: systems that reward confidence.
Employers increasingly point to a lack of confidence in younger employees (often described as a lack of experience in the realities of holding down a job), at the same time that young people have less experience of being employed than ever before. Work experience programmes are poorly engaged with by international standards, and open largely to students who benefit from other advantages.
It takes more effort for employers to support younger workers – even as it becomes more expensive to employ them (the NIC contributions rise, the rise in the youth minimum wage). Milburn does not directly criticise the rise in the statutory minimum wage, or the enhanced worker protections available to new employees: he simply notes that employers are reporting that these factors make the decision to recruit harder.
The story so far
We have existing programmes, interventions, and policies aimed at re-engaging young people who are not participating in the economy. Milburn notes that many have made a difference, but their cumulative impact has not altered the “fundamental faultlines” of disengagement. On this basis, he promises his final report will describe the parameters of a “system reset”.
As the report concludes:
Nearly one million young people are outside education and work. They are not a statistic. They are the sons and daughters of this country. Some were identified as at risk before they could read. The system knew. It watched. It documented. It published reports. It commissioned evaluations. It launched pilots. It let the funding expire. And it moved on.
A new system would be “build around participation, accountable for outcomes” and – importantly – permanent architecture. It would invest in young people, and prioritise the next generation. It’s a tall order.
