Home Business News Tackling youth unemployment could generate £69bn for UK economy

Tackling youth unemployment could generate £69bn for UK economy

by LLB Reporter
28th Sep 23 6:55 am

Youth unemployment risks diminishing the potential of young people and denting their long-term job prospects. But it could also be costing the economy billions in lost GDP.

According to new calculations from the Youth Employment Group (YEG), reducing the number of young people not in education, employment or training (NEET) to the same levels as the Netherlands could generate £69 billion in GDP .

More than 790,000 young people are currently NEET, a 23% rise over the last two years . This equates to 12.5% of all British young people across the UK, a figure that rises to 13.8% when looking at England alone. The YEG points to The Netherlands, the country boasting the lowest figure in the OECD (4.4%) , as the example to follow.

In a bid to reduce unemployment and protect the life chances of young people, the YEG has today launched the “Young Person’s Guarantee”. If adopted by policymakers in England, young people under the age of 25 will receive support to access employment, training or education within four months of leaving employment or formal education.

Policies to jumpstart the progress necessary to meet the standard of The Young Person’s Guarantee

The Youth Employment Group calls on the government to implement five policies:

1. Proactively support young people in education who are at high risk of NEET.

2. Re-commit to Youth Hubs and extend their services to all economically inactive young people.

3. Establish a new joint ministerial brief between the Department for Work and Pensions and the Department for Education.

4. Pilot a targeted placement scheme for young people who are long-term NEET.

5. Strengthen and broaden the range of Level 2 and Level 3 pathways available to young people.

These proposals were today endorsed by 60 organisations devoted to helping young people into work and training. In a joint letter to Prime Minister Rishi Sunak, they called on the government to adopt the Young Person’s Guarantee for England.

Phoebe Arslanagić-Wakefield, Senior Policy Advisor at Impetus and author of the Young Person’s Guarantee says:

“Time spent neither learning nor earning can permanently dent a young person’s life chances, and despite the efforts of many years, the proportion of young people who are NEET remains far too high.

“Based on best practice and firmly focused on what works, our recommended interventions can jumpstart the process of changing that story and improving our offer to young people, helping them to find work and get the best start, to all our social and economic benefits.”

Popular proposals

The proposals listed in the Young Person’s Guarantee have received a warm response from members of the UK public.

According to a poll by YouGov for the Youth Employment Group :

• 81% of UK adults (81% in England) support the idea that young people should receive support from the government to start work, training or education within four months of becoming unemployed or leaving education.

• Some 43% of people who voted Conservative at the last General Election believed that the government should do more to help young people into work. The figure rises to 71% among Labour voters and stands at 57% for all voters.

• The majority (73% in the UK, 74% in England) believe that reducing youth unemployment will benefit the economy and 74% (in the UK and 74% in England) believe that such a result would be beneficial for health and wellbeing.

• Some 64% of adults in the UK (64% in England) believed that getting more young people into work would make their local community safer.

Tackling youth unemployment: the principles of success

By failing to implement a young person’s guarantee to date, England is falling behind the standards of other developed nations. The Young Person’s Guarantee paper points to best practise both in the UK and around the world points and identifies four evidence-based success factors that must underpin any approach to reducing NEET numbers:

1. Early intervention raises effectiveness.

2. One-to-one support is vital.

3. Public employment services are central.

4. Place-based and nationally coordinated.

Quotes from the YEG Co-Chairs

Tony Wilson, Director of the Institute for Employment Studies and Co-Chair of the YEG, said, “One in eight young people are outside of education or employment, a figure that has barely budged in the last thirty years and if anything has been getting worse in the aftermath of the pandemic.

“This is a waste of young people’s potential but it’s bad for the economy and for living standards too. We should aim for far better, by guaranteeing that all young people will get the help that they need to get into employment or learning. The good news though is that if we can get this right then the benefits of acting now will far outweigh the costs of doing nothing.”

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