Tackling youth unemployment: How will the Youth Contract deliver?

Despite the drop announced this week, the high rate of youth unemployment continues to cause concern. Many organisations which work to support young people are looking for new ways to engage with those young who are not in employment, education or training.

Earlier this week, I attended a Westminster Briefing on Tackling Youth Unemployment: How will the Youth Contract Deliver? Along with delegates from organisations within the private, public and voluntary sectors, I heard about the latest policy developments designed to address the issue and some of the practical implementation concerns around the Youth Contract.

The Youth Contract was introduced by the government to help address the number of young people who are ‘NEET’ (not in employment, education or training). You can find out more about the Youth Contract by clicking here.

The event was chaired by Kirsty McHugh, Chief Executive of the Employment Related Services Association (ERSA). Setting the scene, Kirsty acknowledged the breadth and quantity of provision to support young people but questioned whether the multitude of initiatives was resulting in a disjointed services offer which young people struggled to access. You can read more by clicking here.

The policy angle was outlined by Bill Thorpe from the Department for Work and Pensions (DWP) who provided an overview of the government initiatives to help young people who are ‘NEET’, including elements of the Work Programme and Jobcentre Plus activity.

Bill also described the purpose of the wage incentive introduced as part of the Youth Contract. The idea is to encourage employers to take on a young person by offering them a contribution towards wages. The aim is to encourage employers to take on young people to fill existing vacancies. DWP believes that this will result in ‘real jobs’ for young people rather than creating vacancies for short-term roles which aren’t sustainable. Unfortunately the wage incentive scheme hasn’t been running long enough to yield meaningful results but early outcomes are expected to be published in the new year.

The merits of the wage incentive have been debated at length, including whether, if successful in encouraging employers to take on young people who are unemployed, it will harm older candidates’ chances when they apply for vacancies.

There was also a view on the role of Apprenticeships in reducing the number of unemployed young people from Jessie Buscombe at the National Apprenticeship Service.

Jessie discussed the ambition of achieving ‘parity of esteem’ for Apprenticeships to enable them to become something that young people aspire to as much as they would to a degree, for example.

Jessie also talked about the Apprenticeship Grant for Employers which provides a financial incentive for employers who haven’t previously taken on a young person as an apprentice to do so.

Whilst the number of Apprenticeships has grown significantly over recent years, there is concern that many Apprenticeships are going to people over the age of 25 and there is concern that young people are missing out. Jessie discussed how funding for Apprenticeship training is addressing this with fully-funded training for 16-18 year old apprentices, approximately 50% funded training for 19-24 year olds and a ‘diminishing’ level of contribution from government for training for apprentices who are over 25.

So, with extra funding for employers to take on unemployed young people why aren’t more of them doing so?

The employer’s perspective was provided by John Wastnage from the British Chambers of Commerce.

John highlighted the findings of research carried out with employers of various sizes and from a wide variety of industries.

Employers have real concerns about taking on a young person. They have a preference for experience and in a competitive labour market they can potentially find someone who can demonstrate experience without taking the ‘risk’ of the unknown ability of a young person.

Research shows that only 8% of employers would be confident in recruiting a young person with no qualifications. This increases to 29% where the young person has A’levels and 45% if they are a graduate.

Employers have also pointed to the fact that greater staff retention within their organisations results in limited opportunities and that if they were to take on a young person they wouldn’t expect to see that person be able to generate a profit for their business for at least 12 months.

Employers are also concerned about how ‘work ready’ a young person is. Examples of inappropriate behaviour from young people in interview situations or once they start a job were cited.

John also recommended that the government simplifies the Work Programme and Youth Contract as employers are currently finding some elements of the scheme too complex to engage with. There was also a strong suggestion that providers and subcontractors delivering employment and skills programmes should be better co-ordinated to avoid employers being contacted by large numbers of different providers.

The event also explored some of the practical implications of implementing programmes like the Youth Contract.

One of the biggest concerns is that the eligibility-criteria for the 16- and 17-year-old element is too restrictive. Currently, if a young person has any GCSE grade A*- C, they are not eligible. Some organisations operating the scheme are reporting a lack of eligible young people in their area, with one prime contractor describing their own results so far as ‘abysmal’.

Another concern raised by a number of those who attended the event was a lack of realism in some elements of the support available to young people. Examples of training provision offered to young people to engage them but which doesn’t then result in a job were discussed. The need to promote opportunities which reflect the local labour market and include jobs which may not be seem as ‘glamorous’ is vital. Examples of music production training courses where there are very few job vacancies for these roles were described by some as doing more harm than good by setting unrealistic expectations. There were also examples of a disproportionate number of training places for courses like beauty therapy where there aren’t enough vacancies to accommodate the numbers completing the course whilst Apprenticeships in Insurance Services attract very little interest from young people.

One key underlying theme throughout the whole event was the importance of quality careers guidance both in terms of NEET prevention and helping those who aren’t engaged work towards a positive future.

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