The release of the latest figures for the number of young people (aged under 25) in the UK who are not in education, employment or training (NEET) is a reminder that many of the young people receiving their GCSE results today will not make a smooth transition from education into the world of work.
Although there has been a welcome fall in the number of young people who are NEET – down 20,000 from the previous quarter and 138,000 from a year earlier – there are still 955,000 who find themselves in this position: more than one in eight of all young people. Around half of these are looking and available for work and are classified as unemployed (with the rest counted as economically inactive).
A long period without work, while young, can have a long-lasting effect on a person’s life chances, leading to a higher future likelihood of unemployment and lower future earnings. Policymakers should make it a priority to bring the proportion of NEETs in the UK down to the rates seen in those countries in Europe that perform best in this respect: Germany, Austria, Denmark and the Netherlands all have NETT rates that are least than half the rate in the UK.
In a recent report, we analysed the experience of young people across Europe and found that - for those who do not go to university -a strong workplace-based vocational education and training system, with high employer involvement, contributes more to a smoother transition from education to work and a low risk of being NEET than anything else. A number of steps will need to be taken to bring the UK’s system into line with the best in Europe.
Employers will need to be more involved in young people’s training to ensure that they develop meaningful, useful skills. One way to increase their engagement would be to make them take a financial stake through the introduction of a youth apprenticeship levy to be paid at a national rate by all firms above a certain size, with the proceeds used to fund vocational education and training for young apprentices.
At the same time, vocational education in England will need to be reformed so that it is held in higher esteem by employers and young people. This will require a greater focus on employability. Higher level vocational education should be seen as a valid alternative pathway into work to a university education.
Apprenticeships will also need to be improved. The coalition government has taken some welcome steps make them better but more needs to be done. Apprenticeships should be seen by students and employers as a high-quality vocational route into work for young people. No one aged 23 or over should be allowed to start an apprenticeship (except in exceptional circumstances) and few apprentices should be aged 25 or over. All apprenticeships should be at level 3 and above and should last for a minimum of one year. Traineeships should be developed into pre-apprenticeships. And apprentices should spend at least 30 per cent of their time doing off-the-job training.
Careers education and guidance play a crucial role in ensuring a smooth transition from education to work in those European countries that have low rates of youth unemployment. Careers education should be embedded in the curriculum from primary school onwards and for pupils in Years 7, 8 and 9 should involve a greater degree of contact with local employers. Careers guidance – and some careers education – should be provided by specialist advisers, not teachers and every secondary school should be required to appoint a full-time Careers Officer responsible for careers education and guidance and for liaison with local employers.
Finally, a distinct work, training and benefits system should be established for young people with a youth allowance available to all young people aged 18 to 21 years old in further education and training or who are actively looking for a job; a job guarantee, which would provide paid work experience to any young person aged 18 to 21 years old who has been out of work and looking for a job for six months; and a personal adviser who would help young people to find work or to identify the most appropriate further education and training opportunities.
Tony Dolphin is Chief Economist at IPPR