Reform for NEETs must work for those most in need

Opportunities for young people to gain skills are welcome – but reforms must be tailored to local labour markets, says Alice Rowland

Today the Office for National Statistics has published data on NEETs – young people not in employment, education or training. This follows David Cameron’s announcement last week that if the Conservatives win the next election, 18-21 year-olds out of employment, education or training for six months will have to enrol in voluntary work to claim unemployment benefit.

But sanctions on young people are not in themselves a solution to the UK’s skills and unemployment problem. Unless training opportunities allow young people to gain skills that match the needs of employers in the local labour market, and are targeted at those who need them most, it may not help them to get and stay in work.

While greater opportunities for young people to gain skills must be welcomed, the evidence suggests that enforcing compulsory work experience has serious limitations. Recent evaluation of a DWP pilot of a similar scheme uncovered major flaws. Although those who completed the placements had some positive experiences, only half actually started placements, and of those more than half (56 per cent) failed to complete the full placement. The evaluation also highlighted a lack of diversity of placements (58 per cent were in charity shops) and nearly half of the participants felt their placements were not tailored to their strengths or future aspirations.

Some evidence suggests attaching greater sanctions to benefits may have initially positive effects on reducing benefit claimant numbers and getting people into short-term jobs. Crucially, though, long-term outcomes for earnings, job quality and employment retention are less positive.

What works in one place may not work somewhere else – wages, job security and distribution between occupations differ vastly between cities. For example, between 2001 and 2011, one in three workers earned less than two thirds of the median wage in Hull, Grimsby and Blackburn compared to just one in ten workers in the Greater South East. Previous JRF research suggests that 16-24 year-olds are already at high risk of experiencing poverty, and the proposed reforms pose a very real risk that vulnerable individuals who need help are pushed out of the system altogether.

Investing in local skills infrastructure and allowing local authorities and city regions greater control over skills budgets could be an alternative solution to dealing with youth unemployment. This can help ensure the skills gained by the workforce meet the demands of local employers and can mean better long-term prospects for individuals. An example is the Leeds City Region Enterprise Advisor Pilot, which aims to encourage a more strategic approach is taken to employer engagement in schools.

City Deals can provide a platform for this localised skills provision. The Sheffield City Deal included a £23.8 million adult skills and apprenticeship budget, which was used strategically to try and create a ‘demand-led system’, particularly to train 2,000 employees with the skills needed by local businesses and create 4,000 more apprenticeships.

Reforms to help improve individuals’ skills and prospects must be welcomed, but to truly succeed they must be both tailored to the local labour market and linked to those most in need.