1.1 Memorandum submitted by the Trades Union Congress (TUC)

 

2.1 Introduction

2.1 The TUC welcomes the opportunity to contribute to the Committee's inquiry into young people not in education, employment or training. The significant impact of the recession on the wider youth labour market and the repercussions of this for the 16-18 age cohort makes this a very timely inquiry. In addition, the raising of the participation age over the coming years is a significant policy measure and it is essential that transition towards implementation is underpinned by positive progress in increasing the proportion of 16-18 year olds involved in education and training.

2.2 Whilst this submission does on occasion make reference to policy development relating to the wider youth labour market (i.e. 16-24 year olds) it assumes that the Committee's inquiry is focused on 16-18 year olds not in education, employment or training (commonly referred to as the NEET group). Throughout this submission the abbreviation - NEET - is used to refer to 16-18 year olds not in education, employment or employment.

3.1 Impact of the recession

3.1 The recession has undoubtedly had a significant negative impact on the NEET group and the wider youth labour market. Very recent labour market trends may now be indicating that employers are ceasing to shed labour at the same rate but that they are counterbalancing this by continuing to curtail their recruitment of young people. For example, the latest TUC analysis of the Labour Force Survey (LFS) employment data shows that employment for 16-24 year olds fell by 89,000 between the April-June and July-September quarters last year whilst employment for those aged 25 to state pension age increased by 67,000 during the same period.[1] At the same time the TUC has published an analysis concluding that the government's policies to combat youth unemployment will help to ensure that long-term joblessness among this group will not be as severe as in the 1980s.[2]

3.2 The latest annual analysis of the NEET group undertaken by DCSF[3] shows that the proportion of 16-18 year olds not in education, employment or training increased from 9.7 per cent at the end of 2007 to 10.3 per cent at the end of 2008. However, this was more than explained by reduced employment opportunities for this age group - 56 per cent of those not in education or training were in work in 2007 compared to only 49 per cent in 2008. During the same period there was a further welcome increase in the proportion of 16-18 year olds in education or training - up from 78 to 79.7 per cent - but this was not enough to tackle the overall increase in the NEET rate due to the declining employment rate.

3.3 Unpublished analysis by the TUC of the latest LFS data shows that the ILO unemployment rate for 16-17 year olds not in full-time education is currently 32.6 per cent, and has been rising since early 2008. However, between quarters 2 and 3 of 2009 it fell 4.5 percentage points from 37.1 per cent. The employment rate among young people aged 16-17 who are not in full-time education is 40.2 per cent, and has been falling since early 2006. This rate has been falling since the late 1990s, with a sharp increase in decline since the recession started. There was a small increase of 2 percentage points in the employment rate between quarters 2 and 3 of last year of this year, but this seems unlikely to be a longer-term trend.

3.4 However, on an internationally comparative basis it is clear that the UK is still performing very poorly as regards the proportion of young people that are in some form of education or training. According to recent data published by the OECD[4] comparing the proportion of 15-19 year olds in some form of education or training, the UK rate of 62 per cent is the second worst performance among all the OECD countries. All the other countries (bar Turkey) have a much higher rate of participation for this age group compared to the UK, ranging from 73 per cent to 96 per cent, with an OECD average of 84 per cent and an EU19 average of 87 per cent. These statistics highlight the continuing gulf between the UK and most of the rest of the OECD when it comes to participation in education and training among young people in this age group.

4.1 Recent policy initiatives

4.1 The TUC has welcomed the priority that the Government has given to tackling youth unemployment. In the 1980s recession too many young people who lost their jobs were not given adequate support and over two million of them were unable to find work even after the recession had ended. The TUC has therefore welcomed the commitment set out in the recent White Paper[5] to provide over 100,000 new opportunities to guarantee a job, training or work experience to every 18-24 year old who has been out of work for 6 months.

4.2 It will be important that this new Youth Guarantee operates in such a way that it will offer early support to the NEET group, especially those who have had NEET status for an extended period between the ages of 16 and 18. One of the key challenges facing policy makers is that, compared with many other countries, participation in education and training in the UK declines at a very rapid rate during the later teenage years. A central thrust of the Youth Guarantee should be to tackle this trend, including empowering young people transferring onto the benefit system from the NEET group to access suitable education and training that will help them achieve sustainable employment over the longer term.

4.3 It is also very welcome that the White Paper gives due recognition to the need for more help for 16-17 year olds, especially those who fall within the NEET group. It reiterates the government's aim 'for all young people aged 16-17 to be in education or training, including work-based learning options such as apprenticeships' and also includes a number of new measures to support this policy aim. The TUC supports the thrust of these new measures which aim: to increase the number of education and training opportunities that are made available to this age group; to develop a more co-ordinated response by Connexions, Jobcentre Plus and other agencies; and to expand the number of young people that are eligible for Education Maintenance Allowances.

4.4 As well as announcing these new policy measures the Government published two new documents in December, one setting out a strategy for increasing the proportion of 16-24 year olds in education, employment or training and another setting out a strategy for supporting local areas to implement successfully the Raising the Participation Age policy. These two strategy papers are to be welcomed in that they set out a clear strategic direction for achieving the overall aim of tackling the UK's lamentable record in retaining young people in some form of education and training beyond the current compulsory school age of 16.

5.1 Funding an individualised approach

5.1 The TUC has repeatedly called on the Government to invest in a comprehensive strategy to tackle the scourge of unemployment and to ignore the calls from some quarters to accelerate cuts to public spending. This is particularly important in relation to youth unemployment as all the research in this area highlights that the scarring effects of unemployment on young people are especially severe. The decision by the Government to increase investment in programmes to tackle youth unemployment, such as the Youth Guarantee, and to increase spending on education and training for 16-18 year olds is exactly the right approach at this point in the economic cycle. Over the longer term this will significantly boost the proportion of young people who will be able to benefit from the economic recovery as it strengthens rather than repeating the experience of previous decades when too many young people remained unemployed for a long period after recessions ended.

5.2 The Pre-Budget Report and the two recent White Papers on employment5 and skills[6] have included additional funding in a number of areas for 16-18 year olds, in particular by expanding and strengthening the apprenticeship route and the range of options included in the September Guarantee. It is imperative that this funding is sustained in order to further develop the education and skills system for this age group by ensuring that all 16-18 year olds can access a choice of options that will enable them to pursue one that best meets their individual needs. As essential as this is in supporting the existing cohort, it will be even more significant as the phased introduction of raising the participation age (RPA) approaches. In effect the RPA will virtually eradicate the concept of the NEET group as it will become compulsory for all 16-18 year olds to be in education or training. The major risk to this policy is that the compulsory element will become unpopular among a core of young people whose needs are not being adequately met and who feel they are being forced into unsuitable options.

6.1 Identification and support systems

6.1 The Government has recently published a welcome strategy paper[7] on its wider aim of increasing the proportion of 16-24 year olds in education, employment and training. In addition to a range of new policy approaches and a boost to funding, a key feature of the new approach is to build better partnerships at the local and regional levels to tackle unemployment and support more young people to stay in education or training. Local authorities are quite rightly at the heart of these partnerships and this role has been strengthened by the previous policy decision to give them the lead remit for education and skills provision for all 16-19 year olds.

6.2 Empowering all LAs and partner bodies, such as RDAs, to develop a coherent and effective strategy to reduce the NEET group in specific localities must be a key priority of the new Young People's Learning Agency. There is already evidence of pioneering local authorities who are fulfilling this ambition and bucking the national NEET trend. A recent article in the Financial Times highlighted, among others, the example of Sandwell Metropolitan Borough Council which through an innovative approach has reduced its NEET rate from 15.6 to 11.8 per cent in less than three years.[8]

6.3 The Government's new strategy also highlights the crucial importance of strategies for early identification of young people who are likely to fall within the NEET group well before they reach the age of 16. Constructive partnerships between agencies such as the Connexions Service, schools, Jobcentre Plus and others are vital in this respect. Ongoing reforms such as the development of more personalised learning and one-to-one tuition in schools and the closer integration of employment and skills provision will also support a more collaborative approach to supporting more young people to either avoid falling into the NEET group in the first place or to achieve a speedy exit if circumstances force them into this position.

7.1 Apprenticeships

7.1 The TUC has strongly supported the Government's ongoing commitment to raise the number and quality of apprenticeships and to make it a viable option for many more young people. It also makes sense for Government to use all the levers at its disposal to increase the number of apprenticeships available to 16-18 year-olds in order to counter the impact of the recession on this age group. The TUC has welcomed a range of initiatives on this front over the past year, including a more proactive use of government procurement to require contractors to recruit apprentices and also committing to expanding apprenticeships across all parts of public services.

7.2 However, in spite of these initiatives it is evident that the recession has had a disproportionately negative impact on the ability of 16-18 year olds and other young people to access apprenticeships due to limited take-up by employers. The latest official data[9] show that although the total number of apprenticeships increased in 2008/09, this was due to a significant increase in the number of adult apprentices (25 years+) whilst the number of young apprentices declined. The sharpest fall (-7.5 per cent) in apprenticeships was among 16-18 year olds whilst 19-24 year old apprentices fell back by 5.9 per cent.

7.3 In its employment White Paper the Government announced a new employer subsidy of 2,500 linked to the recruitment of apprentices aged 16-17. While the TUC acknowledges that this may prove a positive incentive for some employers to take on younger apprentices, it also needs to be recognised that the reasons why many employers are reluctant to employ young apprentices are varied and complex and will not be wholly resolved by a cash incentive of this nature. For example, many of these young people require mentoring and support in the workplace and this is an area where unions, especially union learning representatives, are playing an increasingly important role. It will also be important to ensure that this new subsidy does not simply function as a 'golden hello' and that employers are obliged to support these young people through to the completion of a high quality apprenticeship. It will also be important for the Government to consult closely with relevant stakeholders about the remit of this new subsidy and how it will be monitored (e.g. to ensure that employers are addressing equality and diversity issues when recruiting).

7.4 Procurement has proved to be a useful tool in incentivising employers at all stages of the supply chain to invest in apprenticeships and training more generally. The TUC has strongly welcomed a number of positive policy measures in this area over the past year culminating in the commitment by government in the recent skills White Paper to use its spending power to require contractors to recruit 20,000 apprentices over the next 3 years. If the recruitment of apprentices aged 16-17 continues to fall back the Government may need to give consideration to whether its procurement strategies could be used in a more targeted way to encourage employers to take on apprentices in this particular age group.

Employment standards

7.5 Over and above the NEET group, there remain a significant number of young people aged 16-18 who are in employment but who are not receiving any accredited training. The research shows that the longer-term outcomes for this group are only slightly better than those belonging to the NEET group. One major benefit of raising the participation age is that all young employees will in the future be engaged in some form of accredited training. However, as highlighted in the subsequent section of this submission on the RPA, the TUC is concerned that there needs to be a greater onus on employers to ensure that they are meeting their obligations within the RPA framework. However, the reality at present is that too many 16-18 year olds in employment are not receiving any training and too few eligible employees in this age-group are making use of the right to time off for study or training and this should be addressed by Government.

7.6 The TUC is also concerned that the urgent need to tackle youth unemployment should not lead to the weakening of other key employment rights as a result of lobbying by employer bodies. This particularly applies to the National Minimum Wage (NMW) and in particular to the position of apprentices aged 16-18 who are currently not covered.[10] The Government has asked the Low Pay Commission (LPC) to consider establishing new rates in order to protect those apprentices that are currently not covered. The TUC submission to the LPC[11] has highlighted that, on past evidence,[12] giving all apprentices coverage under the NMW is likely to improve standards and completion rates without impacting on take-up. The TUC is recommending that apprentices currently not covered should be protected by three new age-based hourly rates (linked to specific age-groups) based on a discount of 10 to 15 per cent from the existing NMW rates.

7.7 The TUC acknowledges that properly structured work experience plays an important role in preparing young people for the world of work, especially for the NEET group. However, due care needs to be taken to ensure that this complies with the NMW Regulations, working time limits for younger workers and other employment law where applicable (e.g. health and safety), since young people can be particularly vulnerable when it comes to dealing with unscrupulous employers. Younger workers are entitled to the same employment rights as other workers with the only exceptions being rights to statutory redundancy pay. There is also a need for all employer bodies to heed the government's call to engage a wider number of employers in supplying quality work experience placements for young people.

8.1 Raising the Participation Age (RPA)

8.1 The TUC has supported the policy of raising the participation age to 18 over the coming years on the basis that economic and social change makes it increasingly imperative that all young people continue in some form of education or training at least to the age of 18. The internationally comparative data showing the UK lagging behind other OECD countries on this indicator is another reason for justifying the new policy approach. However, the TUC is concerned that this policy change should not lead to the establishment of a highly compulsory approach which could lead to young people being forced into inappropriate options or being penalised for non-participation when they are not being offered an adequate range of options.

8.2 For this reason it is important that the ongoing expansion of vocational pathways for young people, especially apprenticeships and the new diplomas, are well established by 2013 when the participation age is raised to 17. It is welcome that the Government is working closely with all stakeholders to prepare for the roll-out of RPA and that they recognise that local authorities are at the heart of this. In line with this it is crucial that RPA is not seen as a means of 'solving' the NEET problem. As the Minister indicated in the recent strategy paper[13], 'Legislation is not enough to end the phenomenon of 16 and 17 year olds NEET'. The priority for Government in the run-up to the RPA implementation must be to put in place an education and training system that meets the needs of all 16-18 year olds so that the full implementation of RPA in 2015 is viewed as the accepted norm by all young people.

8.3 In its submission to the government's consultation on RPA[14] the TUC stressed that the 'primary focus [of the new system] should be on support, encouragement and an attractive offer.' To achieve this it will be necessary to ensure that there is a greater onus on employers to meet their RPA obligations regarding young people in their employment rather than focusing compulsion wholly on the individual. In addition, RPA will require many more employers to 'step up to the plate' by taking up the government's support for apprenticeships, work experience placements and vocational training in the workplace.

8.4 The government also needs to clearly acknowledge the key role of trade unions in supporting young people in the workplace, including bargaining with employers to expand training opportunities. Unions, and in particular union learning representatives, also have a significant role in mentoring young people and providing them with information and guidance on learning and skills. The government highlighted this in the recent skills White Paper, in particular relating to the revitalised union role in supporting apprentices in the workplace.

8.5 Appropriate financial support is also crucial to empower many more 16-18 year olds to remain in education or training and the recent announcement to increase the numbers eligible for Education Maintenance Allowances is to be welcomed. A highly individualised approach under the RPA needs to be accompanied by a financial support system that tackles the economic barriers that face too many young people from disadvantaged backgrounds.

 

December 2009

9.1

References



[1] TUC (2009) Labour Market Analysis, November 2009 (www.tuc.org.uk/economy/tuc-17231-f0.cfm)

[2] TUC (2009) Young People Doing Better in this Recession than in the 1980s (TUC Press Release, 14/12/2009)

[3] DCSF (2009) Statistical First Release. Participation in Education, Training and Employment by 16-18 Year Olds in England

[4] OECD (2009) Education at a Glance 2009 (Table C3.2a)

[5] DWP (2009) Building Britain's Recovery: achieving full employment

[6] DBIS (2009) Skills for Growth: the national skills strategy

[7] DCSF, DWB & BIS (2009) Investing in Potential: our strategy to increase the proportion of 16-24 year olds in education, employment or training

[8] Financial Times (2010) Innovative Thinking Reduces Number of Idle Teenagers, 4/1/2010

[9] Data Service (2009) First Release. Post-16 Education & Skills: Learner Participation, Outcomes and Level of Highest Qualification Held

[10] Apprentices aged 19-24 are also exempted from the NMW but only for the first year of their apprenticeship

[11] TUC (2009) LPC: Apprentices Currently Exempt from the Minimum Wage - TUC response (www.tuc.org.uk/extras/lpcapprenticepay2009.pdf)

[12] In 2005 the Government set a minimum weekly pay rate for apprentices at 80, which has now increased to 95. Despite claims from some employer groups that a minimum pay rate would stop businesses offering apprenticeships, in actual fact since then the number of places has increased and course completion rates have continued to improve.

 

[13] DCSF (2009) Raising the Participation Age: supporting local areas to deliver

[14] TUC (2007) Raising Expectations: staying on in education and training post-16 - TUC submission to the DfES consultation (www.tuc.org.uk/skills/tuc-13463-f0.cfm)