Memorandum submitted by Child Poverty Action Group

 

 

Introduction

 

1. CPAG welcomes the opportunity to respond to the Children, Schools and Families Committee's inquiry into young people not in education, employment or training (NEETs). As an organisation campaigning to eradicate child poverty, we recognise the need to support NEET young people and their families, and welcome this focus from the committee.

 

2. The terms of the inquiry call specifically for evidence around five key points, however CPAG's response is limited to two of these areas; (2) services and supports for NEETs, (4) the impacts of raising the educational participation age (RPA). We would like to highlight the importance of tackling child and family poverty in addressing these areas.

 

3. For the purposes of this submission, we are using the provided definition of a 'NEET'; a 16 to 18-year-old not in education, employment or training. We acknowledge that many children who are classified at NEETs might be participating in many valuable ways - such as those with significant caring responsibilities. Further, we understand that children of all ages may not be in education, employment or training - for example children excluded from the education system earlier - and that these young people too require specific support. For simplicity however, below we are referring simply to young people 16 - 18 not in education, employment or training.

 

4. CPAG's concern for NEET young people is two fold; firstly they are more likely to be already children experiencing poverty, and secondly they are more at risk of experiencing poverty as adults.

 

5. Firstly, young people from low income households are more likely to become NEET. The Social Exclusion Unit reports suggests that the risks factors that lead to young people becoming NEETS include, poor educational achievement, disadvantaged family backgrounds, chronic illness, disability, learning difficult or disability, or special educational needs; being a care-leaver; being homeless; having mental health problems; having misused drugs and alcohol; local labour markets with poor job prospects[1]. All these risks factors are closely associated with poverty. In 2005, 11 per cent of the general 16 - 19 year old population were NEETs, but this rose to 16 per cent for those from lower social groups[2].

 

6. These NEET young people -- who are more likely to already be poor -- are also likely to suffer further financial hardship when they disengage from education, training or work. The vast majority of NEETs are not entitled to any independent benefits[3] and family of NEETs are not eligible for the Child Benefits or Child Tax Credits for these young people. The example below illustrates this point; the family income after housing costs drops by 53 per cent per week when the young person leaves education, training and employment. This can decreases the income of already hard up families, and prevent major barriers to re-engaging with education, employment or training.

 

 

Case study 1: The weekly income for a family comprised of a lone parent of a 17 year old (eligible for the EMA), working 35 hours per week on the minimum wage (5.80/ hour) living in a privately rented flat for 300 / week in Hackney.

 

 

Weekly income while the 17 yo is in education, training and employment

Weekly income when the 17 yo disengages from education, training and employment

Parent's Wages after tax

177.45 (203 - 15.81 PAYE)

177.45

Child's EMA

30

0

Child Benefit

20

0

Child Tax Credit and Working Tax Credit

109.13

20.02

Council Tax Benefit

0

0

Housing Benefit

230.72

227.92

Total before housing costs

567.30

425.39

Total after housing costs

267.30

125.39 (a 53 percent decrease).

 

7. Secondly, given that the risk factors associated with being a NEET are also closely associated with the risk factors for youth unemployment[4], it is highly likely that many young people who become NEETs, will remain in poverty.

 

8. Being NEET is a major predictor of later unemployment and reduces adult incomes. Recent research has shown that a stint of being a NEET can leave an income 'scar' of around 12 - 15 per cent by the age of 42[5]. Youth unemployment increases the risk of adult unemployment; controlling for background, Gregg[6] found that an extra three months of unemployment before the age of 23, leads to an extra 1.3 months of unemployment between the ages of 28 and 33. If, as the government suggests, work is indeed the best route out of poverty, the experience of being a NEET impacts on your long-term risk of experiencing poverty.

 

9. Meeting the ambitious commitment to eradicating child poverty by 2020, and halving the numbers of children in poverty by next year (2010), is therefore likely reduce the number of children dropping out of the education system. To meet the 2010 figure, an estimated 650,000 more children need to be lifted out of poverty. The latest DWP figures show that there are 233,000 young people not in employment, education or training, roughly 10. 3 per cent of 16 - 18 year olds[7]. Adequately addressing child poverty would work towards preventing young people from disengaging for the education system in the first place.

 

10. Being a NEET also has impacts on child wellbeing. Studies have found that unemployment leads to reduced well-being, psychological stress and unhappiness[8]. Considering that the latest UNICEF report card on Child Wellbeing in Rich Countries placed the UK on the bottom of the league, there is cause for concern[9]. The report placed the UK third from the bottom on the 'Relative poverty table: percentage of children 0-17 in households below 60per cent median. Only New Zealand and the United States did worse.

 

11. International comparisons on NEETS are similarly concerning. Research shows that the UK is the worst OECD country for the level of NEETS. We have nearly four times as many NEETs as France, and twice as many as the US. Only Turkey, Israel, Spain and Brazil, have proportionally more NEETs than the UK[10]. It is hardly surprising that the UK which experiences high rates of child poverty should also have high rates of NEETS. Given the wealth of the UK, we can and must do better than this.

 

12. Although this inquiry is both welcome and timely, CPAG believes that unless policies recognise the close correlation between poverty, poor educational attainment levels and the risk of becoming a NEET, they are unlikely to be effective.

 

Question 2: Services and Programmes to support those most at risk of becoming NEETs, and to reduce the numbers and address the needs of those who have become persistently NEET.

 

13. Despite the likely correlation between being a NEET and living in poverty, financial support available to young people and families in workless households is generally set below the poverty line and the benefit and tax credit system discriminates against young people. Given the intergenerational nature of poverty, and the barriers that low income can pose to employment, education and training, this needs to be addressed. Reducing the number of NEETS requires a holistic approach, which recognises the need to reduce poverty among this vulnerable group.

 

The Costs of Participation

 

14. CPAG's Chicken and Egg[11] report highlights a vicious cycle between experiencing poverty, and low educational achievements. Children experiencing poverty are less likely to succeed at school, or even to enjoy it[12]. Drop out and success rates worsen below the poverty line; just over 6 per cent of Free School Meal (FSM) pupils remain at school to take A levels, compared to around 40 per cent of students overall[13], and in 2008 a mere 176 of the FSM students who stayed on received 3As (about 0.5 per cent)[14].

 

15. If the intention is to reduce the number of young people leaving education and becoming NEET, and to reduce the risk of poor students becoming NEET, this educational divide must be addressed within schools. Young people need adequate support to see the value of staying in education, rather than just being compelled to do so by raising the participation age. Additional school costs generate educational exclusion and contribute to a selective educational system. Ensuring that schools understand and implement guidance on such costs would reduce stigmatising policies in school, reduce costs to families, and facilitate a higher level of educational inclusion. CPAG recommend that the government implements school charging policies more effectively, extends FSM eligibility for 16 - 17 year olds, and considers the effect of parental choice on schools segregation.

 

16. The type of employment and workplace training offered to NEET young people also matters. Young people often experience discrimination in the workforce[15], and can only access sub-prime jobs. These jobs can often leave them in in-work poverty, thus disincentivising work. As young people, they generally do not qualify for the working tax credit, perpetuating low incomes even if they find employment. Consideration needs to be given about the type of employment and vocational training offered to NEETs, to ensure they can access quality work that provides a positive life experience that will compensate for the negative time they are likely to have had in the education system. Compelling them to engage in poorly paid or inappropriate training or jobs may well make a bad situation worse.

 

17. The reduced rate of the National Minimum wage (NMW) for 16 and 17-year-olds also leaves the very few who do move into work vulnerable to exploitation. Currently, the NMW is 3.57 / hour for 16 - 17 year olds (62 per cent of the 'adult' wage), 4.83 / hour for 18 - 21 year olds (83 per cent) 5.80 per hour for 'adults'[16]. There is extensive evidence that suggests that introducing or increasing the minimum wage for young workers has little to no effect on employment opportunities[17]. CPAG therefore recommends that the NMW rate for 16 - 17 year olds should be harmonised with the adult rate.

 

Services and Programmes to support care leavers

18. Young people leaving care are disproportionately more likely to become NEET, and to lack adequate financial support. The DfES' 2007 Care Matters[18] confirms that that children in care are 'disproportionately from poor backgrounds and have complex needs'. Children who are or have been in care are more likely to come from, and to span, a number of vulnerable groups who face a particular risk of living in poverty. For example, they are over represented among groups of children who experience multiple disadvantages, including NEETs, young offenders, drug users and prisoners.

19. The financial support provided to care leavers aged 16 to 17 is complex and vary according to the kind of care provided (residential care, foster care, or care provided by relatives or family friends) and the local authority in which they live. One of the problems is that financial support for care leavers is provided by different systems financed by different government departments. The benefit and tax credit system is administered by the DWP and HM Treasury, educational maintenance allowance (EMA) is provided by the DCSF, and some support is channelled via local authorities. Differing priorities and perspectives make the system difficult to administer or to understand. There needs to be greater consistency with the financial support available to 16 - 17 year old NEETs who are care leavers.

20. 28 per cent of care leavers are aged 16 and those who have been looked after by a local authority since October 2001 are not entitled to claim IS (unless they are a lone parent or 'unfit for work') but are reliant on their local authority to accommodate them. They are only entitled to claim jobseeker's allowance (JSA) in specified circumstances. In some cases they will only qualify for 'severe hardship payments'. Although very welcome, an EMA grant of 30 per week is unlikely to provide an incentive to remain in or more into full time education or training under these conditions.

21. Further, there are alarming discrepancies in the level of support provided to young people by local authorities. The DfES's Care Matters[19] reveals that 'the grant paid to young people on leaving care varied from 400 in some local authorities to as much as 2,000. The local authority is left to make a judgement as to the level of support required and the evidence is that young people do not always feel they get what they need...' Such postcode lotteries are a scandalous indictment of local authority provision, and are unlikely to reduce the disproportionate risk of care leavers becoming NEETs. Inadequate housing proves a barrier to educational and workplace participation. While 400 is clearly a derisory and inadequate amount, the maximum grant of 2000 is unlikely to cover the additional costs involved in setting up a home, which includes paying a deposit, buying furniture and financing utilities; all creating barriers to participation.

22. CPAG believes that the benefit system should provide a bedrock of financial support for young care leavers who have experienced significant disadvantages as children, and are likely to do so as adults. This would minimise the risks of becoming, and long term impacts of being, a NEET. Given that care leavers are often struggling to establish a home for themselves without the support of family and friends, they need more financial support from the state to address their disproportionate risk of becoming a NEET.

Services and Programmes to young people with disabilities

23. Young people with disabilities need adequate and targeted supports to reduce their risk of becoming NEETs. Young people with disabilities aged between16-19 are 3 times more likely to become a NEET than their non disabled peers[20], and this needs to be addressed,

24. The Education and Employment of Disabled Young People: frustrated ambition[21] clearly outline systemic issues faced by young people with disabilities which may increase their likelihood of becoming NEET:

Despite having aspirations as high as their non-disabled counterparts, young disabled people get lower qualifications.

At age 26, disabled people were more than two and a half times as likely to be out of work as non-disabled people, even after taking account of differences in their educational qualifications.

For those in employment, earnings were 11 per cent lower than their non-disabled counterparts with the same educational qualifications implying discrimination in the workplace.

25. CPAG recommends targeted funding to supporting young people with disabilities in education, employment and training to reduce the risks of them dropping out of the system. Increasing the adequacy and take up of disability living allowance would make a difference. A targeted effort to remove barriers based on direct and indirect discrimination is necessary, and these can be costly. More financial support and funding is necessary to enable young people with disabilities to progress into education, employment or training from 16- 18.

Services and Programmes to young people with in families with disabilities

26. Given the interaction between the risks of family poverty and the risks of becoming NEET, young people whose parents have disabilities also require specific attention.

 

27. Research shows that having caring responsibilities for another family member is a contributory factor to becoming a NEET [22]. Households Below Average Incomes (HBAI)[23] reports that 'working-age adults who were disabled or had a disabled partner accounted for around three in ten of those in households with incomes below 60 per cent of median income'.

 

28. Research shows that access to Disability Living Allowance and passported support such as Carer's Allowance and disability premiums within tax credits play a vital role in reducing child poverty in families affected by disability and a helpful way of identifying the need for additional support. HBAI reveals that in a household with a disabled adult but no disabled child, the risk of poverty rises from 44% in households in receipt of disability benefits to 46% in households not in receipt of disability benefits. In households with both disabled children and a disabled adult, the risk of poverty rises from 32% in households in receipt of disability benefits to 53% in households not in receipt of disability benefits. Increasing the uptake of the DLA, and providing more access to benefits for families with disabilities will help reduce young people's risk of social exclusion, and becoming a NEET.

 

Question 4: The likely impact of raising the participation age (RPA) on strategies for addressing the needs of young NEETs.

 

29. Without adequate financial support, RPA will fail to produce the intended educational and skills improvement for students living on low incomes. Research has consistently shown that students experiencing poverty have lower educational achievement and lower retention rates[24] and that students experiencing poverty are more likely to view school as a punitive environment[25]. The intention to up-skill the future generation and ensure that no young person leaves education without qualifications or workplace skills is laudable. But without tackling the educational divide that poverty creates RPA will not realize this. There is no logic to suggest that the increased risk of low achievement and dislike of education that poor students experience will not continue to exacerbate as the duration of participation increases. Young people need adequate financial support to see the value of staying in education, rather than just being compelled to do by RPA. Supporting NEETs to achieve in education requires measures to lift these young people and their families out of poverty.

 

30. CPAG recommend that hand in hand with raising the participation age, a renewed focus on tackling child poverty is necessary. The level of financial support provided by the Educational Maintenance Allowance, and Child Benefit and Child Tax Credit need to be up-rated to lift these families out of poverty.

 

31. The financial support that is currently available to 16 - 18 year olds continuing in education or training has to be not only adequate, but also timely and appropriate to the needs of these young people, especially with the introduction of RPA. Advice and guidance centres that we have been in contact with[26] suggest that the current eligibility for the Educational Maintenance Allowance (EMA), for example, can provide a barrier to participation. Currently, EMA eligibility is generally based on your previous year's income, and does not take into account changes in circumstances. The targeted intention of the EMA can also prove problematic. One centre told us that "some homeless or estranged students rely on EMA for living expenses while their income support is being processed. One student was told she was not allowed to spend it on living expenses. This caused considerable distress at a most vulnerable time". These sorts of issues with financial support can prove barriers to participation and increase the number of young people becoming NEET. CPAG recommends that the eligibility criteria for financial support and incentives for 16 - 18 year olds to participate be reviewed.

 

Overall recommendations

 

32. The experience of being a NEET is inextricably connected to the experience of child poverty. Supporting NEETs, and reducing the amount of young people not in employment, education or training requires tackling child poverty. This response has outline the importance of:

a. tackling the poverty to prevent young people becoming a NEET in the first place, especially with regards to the poverty-induced educational divide,

b. the need for adequate and flexible financial support to allow 16 - 18 year olds to get the most out of their participation, especially with the RPA , and

c. addressing the specific needs of young care leavers, young people with disabilities and young people from disabled households[27].

However many other complex issues also need addressing.

 

33. CPAG's Ending Child Poverty: A Manifesto for Success outlines the issues in ten key steps necessary to tackle child poverty. These include:

a. Protecting jobs

b. Mending the safety net

c. Moving away from means testing

d. Removing barriers to work

e. Stopping in work poverty

f. Putting in place a child first strategy for childcare

g. Ending the classroom divide

h. Providing fair public services for those who need them most

i. End poverty premiums in taxes and services

j. Ensure a decent home for every family

 

Tackling child poverty is key to reducing the number of NEETs, improving their educational outcomes and providing long lasting and systemic support. NEETS are disproportionately represented in groups experiencing a particularly high risk of poverty - Black, Asian and Minority Ethic young people, Gypsy and Traveller young people, asylum seeking young people and young people with a parent in prison[28]. Targeting support on these groups of young people would help reduce the risk of them becoming NEET.

 

 

34. About CPAG

CPAG is the leading charity campaigning for the abolition of poverty among children and young people in the UK and for the improvement of the lives of low income families. CPAG aims to: raise awareness of the causes, extent, nature and impact of poverty and strategies for its eradication and prevention; bring about positive policy changes for families with children in poverty; and enable those eligible for income maintenance to have access to their full entitlement. CPAG is a founder member of the campaign to End Child Poverty.

 

 

 

December 2009

 



[1] Social Exclusion Unit, 2004 The Impact of Government Policy Exclusion among Young People: a review of literature for the Social Exclusion Unit in breaking the cycle series The Office of The Deputy Prime Minister London

[2] Prime Minister's Delivery Unit 2005 NEET Design Review Presentation PMDU, London

[3] NEETs are only entitlement to Job Seekers Allowance in only exceptional circumstances. Income Support if available if are a lone parent or caring for disabled children. Other entitlements are only accessible to NEETs with caring responsibilities or disabilities

[4] Isengard, B. 203 'Youth Unemployment: Individual Risk Factors and Institutional Determinants: A study of Germany and the United Kingdom' Journal of Youth Studies 6:4 pp 357-376

[5] Gregg, P. & Tominey, E. 2004 The Wage Scar from Youth Unemployment CMPO Working Paper Series 04/097 University of Bristol

[6] Gregg, P. 2001 'The impact of youth unemployment on adult unemployment in the NCDS' Economic Journal 111 pp. 626 -653

[7] Prince, R. 2009 'Number of 'Neets' reaches new high as recession bites' (online) http://www.telegraph.co.uk/news/newstopics/politics/6049350/Number-of-Neets-reaches-new-high-as-recession-bites.html (accessed Dec 12th, 2009)

[8] The Prince's Trust 2007 The Cost of Exclusion: counting the cost of youth disadvantage in the UK The Prince's Trust, London.

[9] Unicef, 2007 Child Poverty in Perspective: An Overview of Child Wellbeing in Rich Countries (online) http://www.unicef-irc.org/publications/pdf/rc7_eng.pdf (accessed Dec 10th, 2009)

[10] OECD, 2009Jobs For Youth (online) http://www.oecd.org/document/25/0,3343,en_2649_33927_40841177_1_1_1_37457,00.html (accessed Dec 10th, 2009)

[11] Child Poverty Action Group 2007 Chicken and Egg: child poverty and educational inequalities CPAG, London

[12] Sutton, L., Smith, N., Dearden, C, & Middleton, S. 2007 A Child's Eye View of Social Difference Joseph Rowntree Foundation, London.

[13] CPAG, 2008 2Skint4school (online) www.cpag.org.uk/2skint4school/details.htm#education (accessed Dec 1, 2009)

[14] Curtis, P. 2008 'Free School Meal Students Loose Out in Race for Top A-Levels' The Guardian (online) http://www.guardian.co.uk/education/2008/feb/23/schools.alevels (accessed Dec 1, 2009)

[15] CRAE, 2009 Making the Case: Why children should b protected from age discrimination and how it can be done CRAE, London

[16] National Minimun Wage 2009, 'National Minimum Wage' (online) http://www.nmwadvice.co.uk/workers.aspx accessed Dec 17th, 2009.

[17] For a summary, see Frayne, C. & Goodman, A. 2004 The impact of introducing a National Minimum Wage for 16 and 17 year olds on employment and education outcomes (online) http://www.lowpay.gov.uk/lowpay/research/pdf/institute-fiscal-studies.pdf (accessed Dec 17th, 2009)

[18] The Department of Education and Skills 2007 Care matters: Transforming the Lives of Children and Young People in care DfES, London

[19] The Department of Education and Skills 2007 op cit pg 89

[20] Disability Rights Commission 2007 Increasing Life Chances Through Learning and Skills: creating an alternative future DRC, London

[21] Burchardt, T. 2009 The Education and Employment of Disabled Young People: frustrated ambition LSE, London.

[22] Hoggarth L and Smith D et al 2004 Understanding the impact of conn3xions on young people at risk DfES, London

[23] Department of Work and Pensions 2009 Households Below Average Income Series HBAI 2007 / 2008, DWP

[24] See for example, CPAGs reports 2Skint4School and Chicken and Egg available from: www.cpag.org.uk/2skint4school

[25] Sutton, L., Smith, N., Dearden, C, & Middleton, S. 2007 A Child's Eye View of Social Difference Joseph Rowntree Foundation, London.

[26] CPAG would like to thank the Advice and Guidance centres for their input, and to particularly acknowledge the help of the Canvey Island Youth Project for their support.

[27] Many other specific groups of young people also require additional support however. Research completed by CPAG (Preston, G. 2005 At Greatest Risk: The Children Most Likely to Be Poor) identifies higher risk of poverty for Black, Asian and Minority Ethic young people, Gypsy and Traveller young people, asylum seeking young people and young people with a parent in prison. Addressing the specific needs of these young people is equally important.

[28] Preston, G. 2005 At Greatest Risk: The Children Most Likely to Be Poor CPAG, London