Memorandum submitted by the Audit Commission


1 The Commission undertakes national studies on a wide range of topics to examine the economy, efficiency, and effectiveness of local public services.[I] We carry out research and provide independent analysis to give insight into complex social problems and best practice in tackling them. We make practical recommendations for policymakers and for people delivering public services. This often includes recommendations to central government relating to its interaction with the bodies that provide local public services. This memorandum draws on evidence from a number of those national studies.


The Audit Commission's response



2 The Audit Commission is pleased to submit evidence to the Children, Schools and Families Committee inquiry into young people who are not in education, employment or training (NEET).

3 Our response draws on early insights from our national study on older teenagers who are not in education, employment or training. We will publish a national report in the summer of 2010.

4 From our research to date, there are some emerging issues that we think are important for the future:

focusing on young people who are NEET is the right priority for local councils to take;

in spite of a variety of government initiatives over the past 20 years, NEET levels have remained around 10 per cent;

the NEET cohort has three distinct groups, and councils need to follow different approaches to support the different needs of young people;

new ways of working will be needed to support young people who are currently NEET or at risk of becoming so;

an increased focus on prevention could bring savings to the public purse in the medium and long term;

there remains a risk that Raising the Participation Age simply shifts the issue of young people being NEET from 16 to 19;

current funding arrangements do not support councils and their partners in taking the most effective approaches to tackling the sustained group of young people who are NEET; and

partnerships are not being used to their full potential.

Detailed response



5 This evidence focuses on areas of our work that relate to young people who are not in education, employment or training. It draws on our experiences from our local work on the Comprehensive Area Assessment (CAA), as well as early insights from our national study on older teenagers.

6 Our national report Tired of Hanging Around (Ref 1) showed how sport and leisure projects can help tackle anti-social behaviour and can support young people. It also found that these projects can be hindered by complicated and short-term funding arrangements. Our national report Are we there yet? (Ref 2) raised questions about the capacity of children's trusts to lead the agenda locally.

7 Reducing the number of young people not in education, employment or training has been a government priority for the last 30 years. Despite a range of initiatives designed to tackle the problem, levels of young people NEET have remained around 10 per cent since the 1990s. In 2008, 10.3 per cent of young people were NEET (208,000 young people). The economic downturn is likely to increase the number of young people who fall into this category.

8 Being NEET has a negative impact on future outcomes for young people, and is costly to society. The measurement of this status runs from age 16 to 18, but the underlying causes can start much earlier and the impacts last much longer. Impending educational policy changes should better prepare all young people to make successful transitions in the future, and reduce the incidence of NEET. However, there is a risk that the problem will just be delayed until age 19 to 24. Local areas need to take action to address that risk.

9 These young people are a priority for local public services: 118 areas (78 per cent) have targets to reduce the numbers of young people NEET in their local area agreements. Local areas face significant changes and challenges over the next few years, which include preparing for Raising the Participation Age; machinery of government changes to 16 to 19 funding; and general pressures on public spending. There is a risk that this group may slip as an overall priority.

10 Within the overall cohort of young people NEET there are three distinct groups with different needs (Table 1 - Ref 3). The 'open to learning' group represents 41 per cent of the overall cohort of young people NEET, and they need modest interventions. The 'undecided' group (22 per cent) needs good information, advice and guidance to help them. Finally, the 'sustained NEET group' (38 per cent) has complex needs that must be tackled before they can progress to education, employment or training. Local areas need to think about understanding the different needs of these groups if they are to effectively plan the right services and interventions.



Table 1 Young people who are NEET have different needs

Source: Speilhofer T, Benton T, Evans K, Featerstone G, Golden S, Nelson J, Smith P, Increasing participation: understanding young people who do not participate in training at 16 or 17, DCSF, 2009

Audit Commission national study - older teenagers not in education, employment or training

11 Faced with increased demand for services and reducing budgets, councils will need to make tough decisions about where to invest their money. Our national study will explore:

what resources are available to support the NEET agenda;

how efficiently they are being used; and

how areas can do more to maximise the resources they have.

12 The study will focus on six key issues:

identifying funding sources available to support the NEET agenda, and the balance between funding for prevention and that for intervening with those already NEET;

exploring what type of provision is available in local areas for young people NEET, including how much it costs and whether local areas can identify positive outcomes from their investments;

examining the impact of central government policy, targets and funding structures on councils and their ability to make the best use of resources in minimising this group;

discovering the extent to which commissioning of services for young people is based on the right evidence;

providing an understanding of how partnerships, facilitated through children's trusts, are being used to make the greatest impact from available resources; and

developing examples of notable practice and tools to help stakeholders make better use of resources in their work with young people.

13 To answer these questions, during our research we will:

update a model of the long-term costs to society of being NEET;

map local and national sources of funding that are available to support young people who are NEET;

analyse local plans and strategies;

undertake interviews with local practitioners in ten fieldwork sites;

carry out focus groups with Connexions personal advisers; and

conduct focus groups with public and private sector employers and voluntary sector providers who run projects for young people NEET.

14 We will complete our research by early 2010, and then start analysis of our data. We expect to publish a national report and practical tools for local areas in summer 2010. The following paragraphs reflect some of the early insights from our research.

Strategies for the identification of young people at risk of falling into the NEET category

15 Local areas need to have, and use, good information in order to identify those young people at risk of becoming NEET. Strides are being made, but we recommend earlier intervention and more joined up working this area.

16 Connexions supports young people by offering information, advice and guidance services between the ages of 14 and 19. Yet many of the risk factors are already visible in primary school age children: teachers interviewed during our fieldwork reported that they could identify young people who are likely to become NEET while they are still in primary school - at year 5 or year 6. Good numeracy and literary programmes in primary schools are important. Research shows that if young people fall behind, they find it hard to catch up and can disengage later.

17 Children's trusts and 14-19 partnerships need to take an approach that is focused on earlier intervention to support young people - especially at primary/secondary school transition. They should make it a joint responsibility for primary and secondary schools to identify young people at risk of being NEET to ensure that information is not lost during school transition.

18 When young people are in secondary schools, the support that Connexions provides from year 9 may be too late to prevent those with multiple barriers from becoming NEET. However our research suggests that Connexions services have little capacity to deliver intervention before year 9.

19 Children's trusts and 14-19 partnerships need to be clear on the offer that Connexions services are making to complement school-based careers advisers. Young people who are at risk of becoming NEET need a clear understanding of who will provide what support at what time. Schools should do more to identify those at risk earlier and be able to offer the right support, or offer alternative curriculum choices, to keep young people engaged. Schools need to play a key role in early identification and prevention, yet we know that their level of engagement on this varies.

20 It is important that Connexions works closely with a range of other local agencies. For example, the challenge of raising aspirations where there is intergenerational worklessness cannot be addressed by Connexions alone. In such families, a whole family approach is needed, to ensure that the next generation of young people who are NEET does not follow a similar path. This will require Connexions to work closely with a range of local agencies.

21 Connexions also needs to be able to act as an effective broker to bring wider support to vulnerable people - for example social workers, child and adolescent mental health services, and youth offending teams.

Funding to support those most at risk of becoming NEET and to reduce the numbers of those who have become persistently NEET

22 Currently most funding comes from the Learning and Skills Council, until this is transferred to local authorities in April 2010. The funding is time limited and focuses on outcomes that are mainly qualification-focused. We believe that this does not meet the needs of the core NEET group with the most complex and challenging needs (see paragraph 10). This group needs more time to progress, and in many cases are not ready to take on further qualifications. This core group of young people need to work towards developing basic work skills and confidence skills before they can progress into education, employment or training.

23 Local areas have tried to fund this more flexible approach to support this core NEET group. They have used funding such as the Working Neighbourhoods Fund and the European Social Fund. However these are short-term funding mechanisms, can be unreliable, and risk funding for these preventative services being cut.

24 Finding appropriate provision for young people with learning difficulties and disabilities continues to be an issue, which increases the likelihood of this group becoming NEET. This is particularly the case for young people with emotional and behavioural difficulties. Such young people may start mainstream provision, but then be excluded because of behavioural problems. Areas can find it hard to commission provision for this group, if there are not skilled providers in the area.

25 For significant group of young people, there is a lack of funding for sufficient pre-level 2 courses. More provision is needed to get this group of young people ready for Entry 2 Employment (E2E) courses, or for apprenticeships. Linked to this, there are issues on progression for these young people. There remains a question about what those young people who have completed E2E or 1 year courses can move on to. Successful progression for 17 and 18 year olds with low level skills remains a real challenge. This is exacerbated by the economic downturn, as many young people who would have moved on to low skilled jobs have fewer opportunities available to them.

The effectiveness of the government's NEET strategy

26 The government needs to take a balanced approach that recognises short, medium and long-term solutions to supporting those young people who are already in this situation, as well as seeking to prevent young people becoming NEET in the future.

27 The national indicator on NEET (NI117) is the most frequently selected in local area agreements, so clearly is of high importance for many local areas. However there are risks that if too much focus is put on achieving the NEET target, it acts as a disincentive to divert scare resources to prevention and early intervention. There is also a risk that resources could be diverted away from young people to tackle adult unemployment owing to the recession.

28 The research that York University is doing for the Commission as part of our study indicates that investing now in services to prevent young people becoming NEET, or intervening with the current group of 16-18 year olds, will bring large savings to the public purse in the medium and long term.

29 The government needs to be clear about the incentives and barriers in the system for young people. While the 30 a week educational maintenance allowance (EMA) is important to some young people, for others it will not be a sufficient financial incentive for entry to education or training. When young people turn 18, higher Job Seekers Allowance rates mean that they will lose money if they take up learning and move on to EMA.

30 There remains the potential for young people to develop life and work skills by volunteering, which could help them to progress to suitable education, employment or training. Yet even if young people are volunteering and developing these skills, they are still classified as NEET.

31 The government needs to take a strategic approach that:

focuses on the individual needs of each young person;

recognises they will have different needs at different times; and

creates an environment where local provision can meet these diverse needs.

The likely impact of Raising the Participation Age on strategies for addressing the needs of young people who are NEET

32 It is important that Raising the Participation Age is supported by local provision that is sustainable and suitable. Taken in isolation, there is a risk that Raising the Participation Age will only delay the point at which young people become NEET to 19. To counter that, local areas will need to develop provision that is sustainable, with clear progression routes for young people that build and develop skills for the future. It is important that suitable support structures are in place, as well as an offer of education, employment or training.

33 In many local areas, there remains a risk that there will not be suitable local provision for those young people who are already NEET, or indeed for the next cohort who are at risk of becoming so in summer 2010.

34 There is also a risk that not all provision will be in place in line with the timetable for Raising the Participation Age. Local areas have expressed concern over a possible change in government and recent policy developments. In relation to the latter, while diplomas are aimed at young people who are less academic, it remains to be seen whether diplomas will be suitable for young people with multiple needs. Meanwhile, the high-level of entry now required for apprenticeships, coupled with the increased demand in the current economic climate, suggests that greater competition for places is likely. As a consequence, apprenticeships will not provide a viable option for the core group of young people who are NEET.

The opportunities and future prospects in education, training and employment for 16-18 year olds

35 There is potential for local authorities to show more leadership to work with all local employers to make them aware of the range of support available to help young people who are NEET. Recent government initiatives include:

The Future Jobs Fund - This is likely to help those young people with qualifications and without any significant barriers to progression, to find work. However, it is unlikely to help the core NEET group who have more complex needs. There is also a risk that the Future Jobs Fund may only create short-term job opportunities that are not sustainable - young people may well find themselves in this situation again in a year's time.

The National Apprenticeships Service - We believe that there is more potential for local authorities and other local public sector bodies to show local leadership and example to promote apprenticeships. For this to be successful, local public bodies will need to make sure the right support package is in place, and that it provides a sustainable offer to young people.

36 The recession is likely to put pressure on provision for unemployed adults, rather than young people who are NEET. However, to ensure that this group is not overlooked, local authorities should act as brokers between young people and local employers.




Ref 1 Audit Commission, Tired of Hanging Around - Using Sport and Leisure Activities to Prevent Anti-Social Behaviour by Young People, Audit Commission, 2009

Ref 2 Audit Commission Are We There Yet? Improving Governance and Resource Management in Children's Trusts, Audit Commission, 2008

Ref 3 Speilhofer T, Benton T, Evans K, Featherstone G, Golden S, Nelson J, Smith P, Increasing Participation: Understanding Young People who do not Participate in Training at 16 or 17, DCSF, 2009


December 2009



[I] Details of current and published studies can be found at