Memorandum submitted by the Private Equity Foundation



1. The Private Equity Foundation (PEF) is pleased to provide evidence to the Select Committee as part of its inquiry into young people not in education, training or employment. The Private Equity Foundation is a leading venture philanthropy fund that works with carefully selected charities to empower young people to reach their full potential.


2. The Private Equity Foundation has developed a model of engaged philanthropy. Since its creation in 2006, PEF has secured the backing of over 70 private equity firms and their advisers, including banks, law firms, accountancy firms, consultants and search firms. Its investments address the NEET issue and include not just money but also pro bono expertise from the private equity community. By sharing its members' business skills, PEF can maximise the social return on its donors' investments and help charities achieve a step change in their impact to ensure even more young people benefit.


3. Over the past three years we have invested in seventeen charities (see annex 1) blending together practical third sector experience with rigorous enquiry about what can help young people reach their full potential. Alongside this, the Private Equity Foundation has funded research into effective policy interventions to address the NEET issue (see annex 2) which has allowed us to consider further what actions need to be taken to tackle the issue effectively.


PEF has had a unique experience in the last three years bringing together business people with the third sector to scale up effective interventions to tackle the NEET issue


4. The Private Equity Foundation searches and evaluates high potential charities; grants funding, agrees priorities and creates partnerships; supports and grows the charity and increases social value. This has led to a significant increase in the reach of the charities in our portfolio as Exhibit 1 below exemplifies.

Exhibit 1


PEF believes that there are four key areas that need to be focused on


We need to create a robust and effective voluntary sector.

Following rigorous analysis, a handful of effective interventions need to be invested in and scaled up across the country. The Private Equity Foundation is working towards such an approach.



There is no silver bullet - only an integrated approach will cater for the needs of NEETs.

All services for NEETs - such as the education system, careers advisers, social services, the health service and other services - all need to be working in conjunction to create a personalised service to NEET young people.


Any approach has to be simple and one that is intelligible to NEET young people.

Many NEETs struggle with even the most basic tasks as many have poor literacy and numeracy levels. It is essential that young people have access to support services that they can understand and engage with, rather than the myriad of fragmented offers they currently face. A NEET service navigator would help young people find their way around the support services available to them and help them see the relevance of these to their lives.


Current rising youth unemployment must not be neglected.

Given the inter-generational nature of worklessness, the current cohort of young people who become unemployed in this recession will be the parents of future NEETs. With over one million young people currently NEET, urgent action is needed to avoid long lasting effects - incentives for employers need to be considered.


The business sector is vital to address the NEET issue and support NEETs


5. There is no set of people better placed to engage with unemployed young people than those who can offer them employment opportunities, act as role models and give their skills voluntarily. Bringing together the business community and charities ensures that charities understand the employability skills businesses expect and young people need. The business community can also drive forward the charity sector to develop effective interventions and maximise the impact of their programmes to more young people.


Working with seventeen charities alongside funding in depth research has helped PEF develop a knowledge base of what works It is clear that:


Early intervention is key.

Whether it is getting young people to school or improving their literacy and numeracy, to have real impact early intervention is needed. Raising the participation age will not in itself help address the NEET issue as many young people have already become disengaged by 16 and could be further alienated by being compelled to participate.


Supporting young people to act as role models to help the NEETs of tomorrow could have a large impact.

PEF is currently investing in a start up charity called City Year. This is a gap year type programme, modelled on the US City Year programme. It will train young volunteers to go into schools and mentor young people. This brings together young people from a variety of backgrounds and gives young people at school, particularly those at risk of being NEET, role models they can relate to and be inspired by.


Intervening to help teenage pregnancy is essential.

Supporting young parents will help the future generation of NEETs, who are likely to come from parents who themselves have been NEET.


Interventions are needed at a community level.

Young people are more likely to become NEET in areas with high unemployment and low aspiration. Therefore, a holistic approach is essential bringing together children, parents, families and communities to tackle the issue. This will create 2 for 1 benefits leading to a positive impact on our communities.




Helping young people understand the world of work as early as possible is vital.

Young people from poor disadvantaged backgrounds with a history of unemployment have no opportunity to experience work or meet role models who are engaged in work. As a result, employers have a huge role to play in addressing this and schools must embrace the inspiration that connection with the world of work and the business community can have on the lives of young people. Introducing young people to the world of work is as important at primary school as it is at secondary school.


These lessons have also been borne out by the research we have funded:

IPPR "Youth Tracker" (2009) - brings together evidence, statistics and opinions from experts on the issue of NEETs in the recession. Experts have highlighted that the recession will create more parental unemployment, stress and family breakdown leading to further NEET young people and pressures on services. With fierce competition for jobs, it has also been suggested that volunteering and publically funded employment must be considered.


Matrix "Wasted Potential"(2008) - the causes behind young people becoming NEET range from education experience to family and home life, social relationships, socio-economic circumstances and psychological factors. Researchers found that there were a variety of reasons for young people becoming NEET. Some choose to opt out by taking a gap year, others struggled academically (often with basic skills), others face major obstacles such as homelessness, substance abuse or are carers and others, for example, due to the recession have not been able to find education, training or employment opportunities.


Demos "A stitch in Time: tackling educational disengagement" (2009) - the interim report findings highlights that early intervention is vital. The key interventions that need to be focused on are around core academic skills of literacy, numeracy, speaking and communication, social and emotional competencies, building aspiration, supporting parents and focus on what we are offering children and young people to engage with inside and outside school


Demos "Service Nation" (2009) found a national civic service could deliver significant benefits including lower dropping out rates, better academic outcomes, higher levels of engagement in schools, improved social skills and improved employability skills. To achieve this a lifecycle approach is needed with service learning at school, as well as support for young people to undertake national civic service for a year. 18-24 year olds receiving Job Seekers Allowance, undergraduates and employees should also be able to participate in shorter service opportunities.


December 2009



















Annex 1. The Private Equity Foundation Charities

Volunteer Reading Help

Community Links

The Place2Be


Women for Women International

Leap Confronting Conflict



School-Home Support

Skill Force

Tomorrows People

Every Child a Chance Trust

Vital Regeneration

Hamburger Hauptschulmodell



City Year

Annex 2: Links to Website


IPPR - Youth Tracker


Matrix "Wasted Potential"


Demos "A stitch in Time: tackling educational disengagement"


Demos Service Nation


December 2009