Chapter 5: Using EU funds to prepare
young people for work |
86. In considering measures to address youth
unemployment, commentators and evidence we received widely accepted
that there is a distinction between stimulating the market to
create jobs for young people (the demand side) and supporting
young people to enable them to access the job market (the supply
side). This Chapter
looks at whether and how EU funds should be used to improve the
skills of young people in order to address youth unemployment.
A holistic approach
87. A number of stakeholders at EU level have
emphasised the need for a holistic approach. In a 2011 resolution
entitled Tackling youth unemployment: possible ways out,
the European Parliament called for a holistic approach which took
into account education, training and the level of growth in Member
States. In a 2013
peer review paper, the European Commission stressed the benefits
of "holistic or 'one stop shop' services", which focussed
on social as well as labour market outcomes. It acknowledged that
the probability of entering the NEET group was linked to socio-economic
factors such as low family income, disability issues, or migrant
88. The young people we spoke to during our visits
to Birmingham and Liverpool (see the note on these visits at Appendix
4), some of whom were from disadvantaged backgrounds or had faced
complex personal barriers to finding work, emphasised the importance
of a holistic approach in seeking to address youth unemployment.
They highlighted the importance of stable and affordable housing
as a prerequisite to long-term employment and said that employers
were often unable to appreciate that personal issues occurring
outside the workplace may affect an employee's ability to attend
or perform properly. They said that this made it harder for young
people with complex backgrounds to find employment. Rathbone,
a voluntary organisation that works with young people, said that
a lack of financial support for travel, subsistence and equipment
could sometimes be more of a barrier to young people accessing
work than capability.
89. The successful provision of support to
young people to prepare them for work demands a holistic approach
centred around the individual. Key issues specific to each individual,
such as their access to transport, the need for a safe and welcoming
environment at home and in the workplace, criminal records, learning
difficulties and other personal considerations, need to be taken
90. Pervenche Berès MEP placed an emphasis
on formal qualifications in terms of the employability of young
people. She referred to hard-to-reach
young people as the "greatest challenge, because not only
do these young people have to get into work, someone has to make
sure that they are able to upgrade their qualifications".
McDonald's agreed with this, saying that it was important that
larger companies offered people without many qualifications an
opportunity to gain further qualifications once they had left
the traditional academic environment, to improve both their skills
However, Ms Berès and McDonald's both agreed that qualifications
were not the only important factor in enabling young people to
access the labour market.
Ms Berès said that there was a problem of even very well
qualified young people not being able to find jobs after gaining
a degree. One
of the young people we met in Birmingham told us that, despite
her four higher education qualifications, she had been unable
to find employment for the last two years. She said that she was
not alone in this situation, and suggested that employability
skills were as important as qualifications. Employment Pathways
CIC, an organisation that works with employers and young people,
said that a range of young people including NEETs, long-term unemployed
and some graduates, lacked the skills to make them employable.
91. Employers suggested that one of the key issues
in the area of unemployment was that young people did not have
the basic skills to take the available jobs. Marks and Spencer
said, "we are seeing
school leavers lacking basic
employability skills, such as communication, self-esteem, confidence".
It said that this created a vicious circle where young people
were unable to get jobs due to their lack of skills, which then
further damaged their confidence.
WORKing for YOUth said that "employers tell us in no uncertain
terms that it is the soft skillsthe communicative skills,
the social skillsthat they find most lacking by the time
people leave school to come to them".
Mike Thompson, Barclays, linked the lack of skills to young people's
readiness for work. He said that "there is a big stigma hanging
over young people at the moment regarding their readiness"
and said that in Barclays' experience, "it does not take
an awful lot to get them ready".
He acknowledged that connecting with and training young people
was perhaps easier for large organisations like Barclays and that
small businesses tended to recruit those who already had experience.
92. Adam Swash, Head of Strategy at Experian
and founder of WORKing for YOUth, said that often, small businesses
did not believe they had the time to give to young people in order
to get them ready for work. The National Association of College
and University Entrepreneurs (NACUE) concurred with this, noting
that the increase in the number of small and medium-sized enterprises
(SMEs) may have changed what was expected of young people entering
the job market.
93. The European Youth Forum, NACUE and Impetus,
a private equity foundation that funds and supports charities
working with young people, said that young people were expected
to have the necessary skills before starting a job and that previously
employers had invested more in training a person over a lifecycle.
The NUS agreed with this and explained:
"at the moment it feels like the responsibility
only flows in one direction
it is the young person's responsibility
to be work-ready. Twenty years ago these people were not ultimately
work-ready but there was an expectation that they went in at mid-level
jobs, they would be trained in the job, they would understand
the cultures of the workplace and they would become work-ready."
94. The EU institutions have made efforts to
overcome this lack of soft skills and improve the training available.
As mentioned in Chapter 3, Box 3, the ERDF provides support to
SMEs to enable them to take on apprentices and trainees. The European
Commission recognises that apprenticeships and work-based learning
ease the transition from education and training to work and it
has developed policies on apprenticeships and traineeships. The
EU initiatives in this area will be discussed in Chapter 7.
95. In recent years a number of factors, including
an increase in the number of small businesses with limited resources,
have resulted in a move towards the expectation that young people
should be 'work-ready', rather than being trained 'on the job'.
We welcome the focus in the European Regional Development Fund
Regulations on supporting SMEs so that they can take on apprentices.
96. In its Communication, An agenda for new
skills and jobs,
the European Commission said that there is a persistent mismatch
between skills available and the needs of the labour markets across
the EU. It outlined a number of different types of mismatch, which
were broadly grouped around two main concepts: a "skill deficit",
where the workers' skills did not meet the requirements of the
job and "skill underutilisation (over-skilling)", where
the workers' skills exceeded those required by the job. The European
Commission also said that the same type of mismatch occurred in
relation to formal qualifications.
In December 2013, the European Commission introduced the EU Skills
Panorama, a website presenting quantitative and qualitative information
on skill needs, skills supply and skills mismatches in different
Member States. The EU Skills Panorama highlights the occupations
with the most and the least jobs available.
97. Business Europe highlighted the impact of
the skills mismatch on youth unemployment. It said:
"there are in the region of two million
unfilled vacancies across the EU at the moment. At the same time,
people are as highly educated as they have ever been, and the
number of people going into tertiary education is growing all
the time, yet we see that in a number of Member States obviously
there are very high levels of youth unemployment".
98. NACUE said that the skills mismatch in the
case of overqualified graduates represented a missed opportunity
for employers, who often did not have the mechanisms in place
to enable young employees to add value to the business.
The British Youth Council suggested that this negative effect
was also likely to be felt by young people for whom an inability
to use their skills could result in a feeling of worthlessness.
Therefore, youth 'underemployment' seemed to be as much of a problem
as youth unemployment.
99. The European Council has reported that the
skills mismatch is particularly apparent in the area of Information
and Communications Technology (ICT) skills. In the October 2013
European Council Conclusions, Member States agreed that this was
a cause for concern in the context of the youth unemployment problem.
The Council found that, in 2011, the EU was faced with 300,000
unfilled vacancies in the ICT sector and that if this trend continued
there could be as many as 900,000 unfilled ICT vacancies by 2015.
At the Paris Youth Employment Conference in November 2013, Herman
Van Rompuy, President of the European Council, said that, despite
the market demand for ICT skills, the number of ICT graduates
was falling. Business
Europe said that employers were increasingly looking for digital
skills, along with a broader range of skills relevant to technology
Science, Technology, Engineering, and Maths (STEM) skills.
However, the European Youth Forum emphasised that a long-term
approach to specialist skills training in general is important,
rather than an overemphasis on ICT skills to the detriment of
other growth sectors. It gave the example of Ireland, where the
ICT sector is particularly important now, but where a few years
ago the construction industry was the employment hub for young
peopleindicating that the level of demand for a certain
skill-set can change rapidly. In addition to a deficit of higher
level ICT skills, the Centre for European Studies, a political
foundation of the European People's Party, spoke about the importance
of a more basic level of "digital literacy" which it
said needed to become "part and parcel" of the education
SKILLS MISMATCH AND DIGITAL LITERACY
IN THE UK
100. In its 2013 Country-specific Recommendation
to the UK, the European Commission said that, despite some progress
in recent years, a significant proportion of young people did
not have the necessary skills to compete successfully in the labour
market. The European
Commission said that the UK had a shortage of workers with high
quality technical skills, at the same time as having an oversupply
of "low-skilled" workers. It found that the unemployment
rate of "low-skilled" 15-25 year olds in the UK was
37.2 per cent in 2013, significantly above the EU average.
101. Go ON UK, a UK based alliance that supports
digital skills, said that digital literacy in the UK was worse
than some other Member States, with six per cent of young people
in the UK lacking the basic online skills required to send an
email. It also mentioned the OECD survey of Adult Skills, published
in 2012, which tested people's proficiency at problem solving
in technology rich environments. The UK came seventh out of the
EU countries on the scale, behind the Scandinavian countries,
Germany and the Netherlands. It said that a possible role for
EU funding in this area could be through matching young unemployed
people with employers, including SMEs who needed employees with
strong digital literacy or higher level ICT skills and supporting
them to train the young people to provide the skills they required.
102. We welcome the efforts made at EU level
to address the skills mismatch, via the introduction of the EU
Skills Panorama. We recognise that the skills mismatch is a particular
problem in the UK, resulting in particularly high unemployment
rates amongst low-skilled young unemployed people. We therefore
recommend that the UK Government integrate the EU Skills Panorama
into careers services provided at a national level, through schools,
job centres and online resources.
103. We agree with the European Council that
a greater focus on Information and Communications Technology (ICT)
skills is necessary, particularly as the ICT sector is currently
experiencing a skills shortage. However, we caution against an
over-concentration in this area, at the expense of other emerging
sectors. The UK Government could use the European Social Fund
and European Regional Development Fund to support enhanced provision
of both basic and higher level ICT training and skills training
in general for young people in schools and businesses.
104. The evidence we received suggested that
careers advice presented a problem in the area of youth unemployment.
Business Europe said that the type of support provided should
be dependent on age and level of education; young people at university
had the benefit of in-house careers advice, whereas for school
leavers who chose not to opt for further education, it was less
straightforward to access information services.
Rebecca Taylor MEP, Vice-Chair of the European Parliament Youth
Intergroup, agreed that more support was needed for school aged
young people and said that it was important to use good careers
advice to show young people the link between their studies and
a potential career, before they "switch off".
She said that as well as school leavers, highly qualified young
graduates were still lacking in the basic skills needed to apply
for jobs, such as a good understanding of employers' expectations.
105. A recent report by McKinsey and Co, the
business consultancy firm, confirmed that careers advice was a
problem across Europe and found that less than a third of the
5,300 young people surveyed in eight Member States felt that they
were getting good careers advice at secondary school level.
106. The European Commission has taken steps
to overcome this issue, through the EURES portal, which is the
EU's information and job search source. However, given its origins,
the portal is largely focused on providing people with the information
and advice they need to go and work in another Member State. Furthermore,
the evidence we received indicated a lack of awareness of the
EURES portal (see Chapter 6, paragraph 130).
CAREERS ADVICE IN THE UK
107. Much of the evidence we received on this
particular topic was UK focused, but given that young people across
the EU feel that they are not receiving good careers advice,
it may well be that the UK experience is relevant to that of other
108. Careers advice for young people under 18
is provided by schools, and advice for those over the age of 18
is provided by the National Careers Service, which is run by the
SFA. The SFA said that the most common searches on its careers
advice website were for a limited set of jobs. The Office for
Standards in Education, Children's Services and Skills (Ofsted)
said that the young people it had surveyed in schools had a very
narrow perspective of the opportunities available to them.
It said that this lack of knowledge about possible careers was
a reflection of the poor careers advice available to young people
in schools. Walpole
Publishing Ltd, a publication company that produces a careers
guidance magazine, agreed that career advice in schools was poor.
It also observed that the use of schools to provide careers advice
presented a conflict of interest, whereby schools received funding
from keeping young people on an academic pathway until sixth form,
whether or not it was best for them.
109. Walpole Publishing Ltd and HECSU expressed
concern with a move from a face-to-face model for careers advice
to a careers service that was primarily online.
HECSU said this had alienated many young people who did not have
access to the internet, found it difficult to navigate websites,
or were looking for nuanced advice and not simply information.
The National Careers Service currently has only 12 face-to-face
centres, which are available solely for young people over the
age of 18. The SFA and the UK Government said that this face-to-face
service was supported by over £8 million from the ESF annually.
110. There are a variety of sources of careers
advice which need to be coordinated. The UK Government should
continue to use the European Social Fund to support the National
Careers Service and extend its face-to-face element beyond the
12 centres currently offered. They should also encourage use of
the European Social Fund to improve labour market knowledge at
earlier stages in young people's progression through education
and training. One way of doing this would be by continuing to
make support available to NEET young people. The National Careers
Service should act as a 'one stop shop' to refer young people
to the different sources of careers advice.
111. We also recommend that the UK Government
use the European Social Fund and the European Regional Development
Fund to enable businesses to connect with schools in order to
provide careers advice. This could be facilitated through business
representation in Local Enterprise Partnerships.
157 McKinsey and Co., (2014), Education to Employment:
Getting Europe's Youth Into Work; Q 187; Q 179 Back
European Commission, (2013) Are they working?: A review of
approaches to supporting young people into work, Mutual Learning
Programme Thematic Paper Back
The term 'hard-to-reach' is a term sometimes used by policy-makers
to describe those sections of a society or community that are
difficult to involve in public participation or government schemes. Back
Q 145 Back
Q 89 Back
Q 89; Q 145 Back
Q 145 Back
Employment Pathways CIC Back
Q 89 Back
Q 89 Back
Q 102 Back
Q 134 Back
Q 210; Q 134; Impetus Back
Q 134 Back
COM (2010) 682 final Back
European Commission (2013), Skills Mismatches and Social Mobility. Back
Q 210; see also Q 156 (Emer Costello MEP); Emma McClarkin MEP;
Anthea McIntyre MEP Back
Q 134 Back
Q 128 Back
European Council Conclusions, 24-25 October 2013, EUCO 169/13 Back
European Commission, Speech by President Herman Van Rompuy, 12
November 2013, available at: http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/139543.pdf Back
Q 211 Back
Q 211 Back
COM(2013) 378 final Back
Q 208 Back
Q 168 Back
McKinsey and Co., (2014), Op. Cit. Back
Q 130 Back
McKinsey and Co., (2014), Op. Cit. Back
Q 220 Back
Walpole; Q 222 Back
Q 222 Back
Q 228; see also Government Back