Unemployment amongst young people aged 16 to 24 has long been a blight on our society. Today 800,000 young people (12.6% of 16 to 24-year-olds) are neither working nor in full-time study. 631,000 (9.3%) are not in any form of education, employment or training (NEET). 475,000 (7%) are unemployed and 163,000 (2.4%) of them have been unemployed for at least six months. Many who are in work do not report receiving any training. For example, 21.8% (141,000) of 18-year-olds are neither in full-time education nor employment with training.
The UK’s youth unemployment rate (currently 11.7%) continues to be worse than other comparable countries including Japan, Germany, the Czech Republic, Israel, Mexico and Switzerland. The impact of youth unemployment can endure for years, damaging individuals’ life chances and work prospects. It could potentially cost the economy £10 billion in 2022 in lost productivity, tax revenue, and additional welfare costs.
Despite this, total funding for post-18 further education (FE) has fallen by over 50% since 2009–10, while spending per student in colleges is 11% lower than a decade earlier. The supply of opportunities for young people to take on apprenticeships continues to lag behind demand, and long-running biases against technical education continue to persist. At the same time, economic changes, technological advances and the drive towards the green agenda have resulted in skills shortages in the jobs market that our young people are not being effectively prepared to meet.
In the face of these challenges, the House of Lords Youth Unemployment Select Committee was appointed in January 2021 to consider youth unemployment, education and skills in England. The report focuses on England as many of the matters we consider are devolved in Northern Ireland, Scotland and Wales; however, we have drawn on good practice from other parts of the UK where relevant and some recommendations may have UK-wide application where they concern reserved matters.
Alongside speaking to Government ministers, experts, charities and businesses, we were particularly keen to hear and emphasise the voices of young people. We held four meetings including with young people who had experience of unemployment, as well as representatives from the organisations that support them. In the first of these sessions we heard from young representatives from across the country; during the second and third we heard from young people in the East Midlands and the Bolton and wider Lancashire area respectively; and the final session focused on young people from ethnic minority backgrounds based in and near London.
The underlying drivers of the UK’s high youth unemployment rates in comparison both to the wider population and internationally are many, complex, and widely debated. We recognise the most important issues as follows:
There are skills gaps and shortages (see Chapter 2) in a variety of existing sectors of high importance, which has a hugely damaging impact on productivity. Recent news coverage bears this out. For example, the Road Haulage Association estimates there is now a shortage of over 100,000 qualified HGV drivers in the UK. Before COVID-19, there was a shortage of 60,000. Brexit has played a role in this; in the year to March 2021, there were 28,000 EU nationals working as HGV drivers, down from 44,000 the previous year, and 39,000 the year before. Equally, social care employers were unable to fill 8% of roles before the pandemic, which has risen to 8.2%. The adult social care vacancy rate has risen 2.3 percentage points since 2012/13. With an ageing population, this issue is likely to increase.
This is a challenge facing a number of key growth areas of crucial importance for the future economy such as the green and digital economies. The green economy could provide more than a million new jobs in low-carbon sectors by 2050.These include those in electricity generation, low-emission vehicles, manufacturing, hydrogen and retrofitting.
Digital skills are a near-universal requirement today and will remain so in future as the digital economy grows. There is no universal definition of these skills; broadly, they are skills needed to use computers and other digital technologies to carry out activities and achieve outcomes. This includes a broad range of skills from basic use of word processing packages, to proficiency in computer science or ‘computing’, which focuses on information, computation, digital systems and programming. We have heard that there is a huge expansion in the number of employers looking to fill posts in in cyber security, artificial intelligence (AI), computing, coding, electrification, and data analysis. 76% of businesses told the Learning and Work Institute that a lack of digital skills would affect their profitability. This is a critical issue because the nature of digital skills in demand is constantly changing as technology develops.
Despite this pressing need, there is no official body responsible for reporting and forecasting skills needs. This role was once carried out by the UK Commission for Employment and Skills (UKCES), but this organisation was disbanded in 2017. As part of the Government’s ‘levelling up’ agenda, the Skills and Post-16 Education Bill (‘the Skills Bill’) is intended to reform technical education, not least by asking employers to work with FE colleges on Local Skills Improvement Plans (LSIPs) to better align courses with employers’ needs. The ambitions of some of the reforms laid out in the Skills Bill are welcome; however, it does not go far enough towards anticipating the needs of the future economy, nor does it influence the thousands of young people who attend mainstream secondary schools.
We have received evidence that there is a mismatch between what schools and colleges teach, and what skills and knowledge employers expect students to have learnt. We heard that the national curriculum is often restricted by the expectations set through the English Baccalaureate (EBacc) and Progress 8, and is too reliant on high stakes written examinations. This system does not help many young people to demonstrate that they have the digital, technical, green or creative skills the economy needs, nor does it enable them to demonstrate essential skills such as problem-solving, teamworking, adaptability or oracy. While acquiring skills for work is not the sole purpose of education, it is a fundamental one. Equally, it does not prepare young people with the life skills they need such as financial literacy, which is more important than ever given the growing ‘gig economy’.
Access to high quality careers education, information, advice and guidance (CEIAG) enables young people to understand all the possible careers open to them and the routes they can choose to take to reach their goals. Significant progress has been made since the creation of the Careers & Enterprise Company (CEC) and the rollout of the Gatsby Benchmarks, but more could be done. Despite its benefits, CEIAG is not a compulsory element of the curriculum in all schools and given that career-defining views develop when children are in primary school, we believe that beginning CEIAG provision in secondary school is too late.
We have heard that provision of high quality CEIAG is patchy across the country, proving a challenge for both young people and employers. It is paramount that young people, particularly those from disadvantaged backgrounds who do not have access to networks, connections and familial advice to rely upon, have access to targeted, one-to-one careers advice and guidance at school or college. Employer engagement is critical to ensuring quality.
Furthermore, more could be done to target CEIAG towards sectors of high and emerging skills needs in the economy as it transitions towards a green and ever more technologically advanced future (see Chapter 2). We have heard that the Baker Clause, which allows providers of technical education (including T levels and apprenticeships) to speak to students in secondary schools, is not being rigorously enforced in all schools. This is despite appetite from young people to hear about these options.
Further to classroom-based careers education, work experience enables young people to understand the workplace and the skills they need to be successful. The removal of the statutory duty on schools to ensure 14- to 16-year-olds undertook work experience at Key Stage 4 has had a devastating impact on this. We heard that a third of employers are either dissatisfied or very dissatisfied by the amount of relevant work experience young people have.
There are many laudable initiatives for work experience in the education sector, including formal programmes like traineeships, the T Level industry placement and Kickstart. However, we recognise that there are challenges for both small businesses in offering work experience, and schools in co-ordinating the available opportunities, and not enough is being done to tackle these issues.
FE (see Chapter 4) is a fundamentally important component of post-16 education provision but for many years it has been undervalued and significantly underfunded. Its providers—including FE Colleges, Sixth Form Colleges and specialist colleges such as Land-based or Art, Design and Performing Arts Colleges—sit between secondary and tertiary education, offering 1.7 million learners in England opportunities to study for a range of qualifications at a range of levels. It is a crucial springboard into employment for many young people.
The post-18 FE sector has faced severe funding cuts of over 50% since 2009–10. The sector has suffered real cuts of around 11% per pupil (aged 16 to 18) compared to other types of post-16 education. Analysis by the Institute for Fiscal Studies (IFS) shows that cuts to FE and sixth forms are only partially reversed by the Budget and will still be 10% down on their 2010 levels in 2024. In fact, most of the funding announced in the Budget is capital expenditure to be used on improving the infrastructure of colleges and FE institutions (£2.8 billion). While important, this will not be enough to deliver the wholescale changes the sector needs to meet to the Government’s ‘levelling up’ ambitions.
FE is held back by a system of funding student places that is no longer fit for purpose. This has limited the sector’s capacity to support its students, many of whom come from the most disadvantaged groups in society. There is no pupil premium to support these students as exists in primary and secondary schools, nor is there adequate additional support outside tuition fees such as exists in HE via maintenance loans.
Furthermore, despite the benefits it can offer, FE is often regarded by schools, parents and students as a less prestigious and less desirable option than HE. Some young people told us that they were encouraged away from FE colleges in favour of sixth forms and routes of study considered more academic.
Together, these factors are limiting the potential of the FE sector to contribute as much as it could, and should, to the ambitious plans laid out by the Government in the Skills Bill, not least in relation to apprenticeship provision and the rollout of T Levels.
Apprenticeships (see Chapter 5) are highly valued by learners and employers and are a crucial pathway for young people who do not want to go to university, who want to earn a wage whilst learning, or who want to take on practical, technical work. We have heard that there are simply not enough apprenticeships available for young people who want to take them. Data from the Institute for Apprenticeships and Technical Education (IfATE) shows that in the year to mid July 2021, a total of 142,124 candidates under 25 years old submitted at least one application using the Find an Apprenticeship service, of whom just 9,587 had an application marked as ‘successful’.
The apprenticeship levy is intended to fund apprenticeships, but it does not properly incentivise the recruitment of young people aged 16 to 24. Systemic faults within the levy have resulted in employers converting existing roles into apprenticeships, benefitting older, more experienced workers. Furthermore, a number of the terms of the levy restrict businesses’ capacity to recruit younger workers. The IFS calculates that the number of 16- and 17-year-olds taking apprenticeships fell by 30% between 2019 and 2020 to just 3% of young people of that age, the lowest level since the 1980s.
There are also not enough incentives, particularly for smaller and medium sized employers (SMEs), for businesses to recruit apprentices. The £3,000 incentives introduced during the pandemic were not targeted by age to increase the recruitment of young people.
We have also been told that young people are not properly supported or encouraged to take up apprenticeships for a number of reasons:
On top of wider issues affecting the labour market and economy, some groups of young people face additional barriers to work (see chapter 6). Identifying these groups is a challenge in itself due to difficulties in data collection methodology, and addressing the disparities the data highlights is even more complex.
However, the evidence we heard and data we saw makes absolutely clear that some Black, Asian and minority ethnic (BAME) groups, including Bangladeshi, Pakistani, Caribbean, African and Gypsy Roma and Traveller communities, are extremely disadvantaged in key areas of employment and education.
Bearing this in mind, we heard that there was a severe lack of programmes targeted specifically at some of the groups likeliest to face disadvantage, such as young people from BAME backgrounds. We heard that specific groups are at significant additional risk, often facing multiple disadvantages. Evidence revealed that:
The issue of youth employment sits uneasily between a variety of government departments including the Department for Education (DfE), the Department for Work and Pensions (DWP), the Department for Business, Energy and Industrial Strategy (BEIS), and the Department for Digital, Culture, Media and Sport (DCMS) (see Chapter 7). This results in policy created in siloes with a lack of accountability at the top. It also results in a confusing landscape of policies intended to tackle the multiplicity of issues.
During periods of economic turbulence, past and present governments have introduced active labour market policies (ALMPs) to get young people into work or training. Examples include the Youth Training Programme of the 1980s and the Future Jobs Fund following the financial crash.
The present Government has introduced a series of welcome measures including Kickstart, Careers Hubs and Youth Hubs, and an expansion in the numbers of Jobcentre Plus (JCP) work coaches by 13,500 (see Appendix 7). This work has been supplemented by initiatives introduced by local authorities and Local Enterprise Partnerships (LEPs). Many of the Government’s schemes have had some success; however, while youth unemployment has decreased since its peak of 14.8% during the COVID-19 pandemic, it still sits at an uncomfortably high 11.7%. Government schemes must be improved, expanded and extended, and better connected to reach those most in need. Key concerns include the following:
On top of these longstanding problems, the COVID-19 pandemic was a perfect storm for youth unemployment. Between January to March 2020 and June to August 2021, employment levels for 18- to 24-year-olds fell by 184,000. 70% of employee job losses between March 2020 and May 2021 were amongst under-25s. Nearly one in five (19%) young people who were working prior to the pandemic had lost their job by January 2021, compared to just 4% for those between the ages of 25 and 54. This was in part because they were more than twice as likely to work in a sector that was shut down than other age groups—for example, the arts, entertainment and recreation sector (12% fall in payrolled employees) and accommodation and food service sector and other services activities (5%).
The situation for young people from ethnic minority backgrounds was even more severe. At the height of the pandemic, the unemployment rate for young black people increased by 17.1 percentage points to 41.6%, compared to just 2.3 percentage points (12.4%) for young white people. For many young people from disadvantaged groups, the pandemic simply exacerbated existing challenges. Latest data shows a slight decline to 36% and 13% respectively.
Young people who were studying have faced two years of disruption to their education, training and social development. Children in England have missed 115 days of face-to-face learning, the biggest loss in education in a generation. This may affect their prospects, as well as further impacting on their mental health and wellbeing.
While our report focusses on the most disadvantaged young people, who are less likely to attend HE, we note that the situation for graduates remains challenging; graduate opportunities in June 2021 were 8% lower than before the pandemic.
No two young people in England are the same, and they all deserve equal support to prepare them for a job they aspire to, no matter their background, gender, ethnicity, whether they have additional needs, where they grew up, or which route they choose to take. Their pathway might include a traineeship, apprenticeship, Kickstart placement, T or A Level, GCSE, BTEC, university degree or degree apprenticeship. What is best for them must be equally understood, supported and valued, and youth employment policy must be designed around their needs.
The measures we propose in this report are intended to help ensure that all young people are supported into education, employment or training, equipped with the skills they need to get good jobs, and can avoid becoming NEET. Our priorities are as follows:
1 Defined as those who are without a job, have actively been seeking work in the past four weeks and are available to start work in the next two weeks; or who are out of work, have found a job and are waiting to start it in the next two weeks
2 Written evidence from Office for National Statistics (
3 Office for National Statistics, ‘Young people not in education, employment or training (NEET), UK: August 2021’: [accessed 10 November 2021]
4 Office for National Statistics, ‘Labour Force Survey; Office for National Statistics, Labour market overview, UK’, November 2021: [accessed 16 November 2021]; House of Commons Library, Youth unemployment statistics, , 16 November 2021
5 The unemployment rate is calculated by dividing the unemployment level for an age group by the total number of economically active people in that age group.
6 Office for National Statistics, Labour market overview, UK: November 2021, [accessed 16 November 2021]; House of Commons Library, Youth unemployment statistics, , 16 November 2021
7 See Prince’s Trust, Learning and Work Institute, HSBC, ‘Facing the future: Employment prospects for young people after Coronavirus’, (March 2021): [accessed 10 November 2021].
8 Institute for Fiscal Studies, Further education and sixth form spending in England, (18 August 2021), pp 2 and 11: [accessed 10 November 2021]; Institute for Fiscal Studies, 2020 annual report on education spending in England (November 2020), pp 93–94: [accessed 10 November 2021]
9 A form of ‘earn and learn’ study where 20% of a young person’s time is spent studying, with the rest spent on practical work in a job.
10 Young people are defined as disadvantaged if they are known to have been eligible for FSM in the past six years (from Years 6 to 11), if they are recorded as having been looked after for at least one day or if they are recorded as having been adopted from care.
11 Skills gaps happen where there is a percentage of the workforce not proficient at their job. Skills shortages occur when vacancies cannot be filled because applicants lack the requisite skills, experience or qualifications. Collectively, they can be referred to as skills mismatches i.e. an imbalance in the supply and demand of skills.
12 ‘How serious is the shortage of lorry drivers?’, BBC News (13 October 2021): [accessed 10 November 2021]
14 Skills for Care, The state of the adult social care sector and workforce in England 2021, (October 2021) p 71: [accessed 10 November 2021]
15 Ecuity Consulting and Local Government Association, Local green jobs - accelerating a sustainable economic recovery (2020): [accessed 16 November 2021]
17 Department for Education, ‘National curriculum in England: computing programmes of study’, 11 September 2013: , [accessed 10 November 2021]
18 Learning and Work Institute, Disconnected? Exploring the digital skills gap (March 2021): [accessed 10 November 2021]
19 A series of steps to improve provision of CEIAG developed by the Gatsby Foundation. See Department for Education, Careers guidance and access for education and training providers (October 2018): [accessed 4 June 2021].
20 (Professor Ewart Keep)
21 Written evidence from the CDI ()
22 Written evidence from Barclays ()
24 Written evidence from the Youth Futures Foundation ()
25 (Mike Cherry)
26 Institute for Fiscal Studies, 2020 annual report on education spending in England (November 2020), p 93–94: [accessed 10 November 2021]
27 Written evidence from the Association of Colleges ()
28 Institute for Fiscal Studies, Spending Review 2021: austerity over but not undone (28 October 2021): [accessed 29 October 2021]
29 Engagement session with young people, 13 April 2021 [See Appendix 5].
30 Department for Education, Apprenticeship vacancies: demand and supply (July 2021): [accessed 10 November 2021]
31 The levy was introduced in April 2017 and paid by all employers who have annual pay bills over £3m.
32 Institute for Fiscal Studies, Further education and sixth form spending in England (18 August 2021), pp 5 and 13: [accessed 10 November 2021]
33 Written evidence from EngineeringUK ()
34 Youth Employment UK, Youth voice census report 2021 (15 September 2021), p 38: [accessed 10 November 2021]
35 (Neil Bates)
36 Written evidence from the Shaw Trust () and Disability Sub-Group of the Youth Employment Group ()
37 See (Dr Jason Arday and Dr Gurleen Popli).
38 Written evidence from Access Generation CIC ()
39 Written evidence from Prisoner Learning Alliance ()
40 Written evidence from The Bell Foundation ()
41 See joint written evidence from the Creative Industries Policy and Evidence Centre (PEC) and the Centre for Cultural Value (CCV) () and written evidence from the Prince’s Trust ().
42 (Michelle Rainbow and Meredith Teasdale)
43 Written evidence from the University of Lincoln ()
44 Written evidence from Young Women’s Trust ()
45 Office for National Statistics, ‘Labour market overview, UK: November 2021’: [accessed 16 November 2021]
46 While Kickstart is intended for those claiming UC, we note that the Chancellor has emphasised that work coaches have discretion as to whom they put forward for placements whether they are claiming UC or not. See oral evidence taken before the Economic Affairs Committee, 2 November 2021 (Session 2021–22), (Rt Hon Rishi Sunak MP).
47 Department for Education, Skills Bootcamps process evaluation (October 2021): [accessed 10 November 2021]
48 Written evidence from the Youth Futures Foundation ()
49 House of Commons Library, Coronavirus: impact on the labour market, , 13 October 2021 and Office for National Statistics, ‘Earnings and employment from Pay As You Earn Real Time Information, seasonally adjusted’: and ‘A05: Employment, unemployment and economic inactivity by age group (seasonally adjusted)’: [accessed 8 November 2021]
50 Resolution Foundation, Double trouble: Exploring the labour market and mental health impact of Covid-19 on young people, May 2021, pp 13 and 31: [accessed 10 November 2021]
51 See Institute for Fiscal Studies, ‘Sector shutdowns during the coronavirus crisis: which workers are most exposed?’: [accessed 10 November 2021]; and House of Commons Library, Coronavirus: impact on the labour market, , 13 October 2021
52 National Audit Office, Employment Support: Department for Work and Pensions (7 June 2021), p 14: [accessed 10 November 2021]
53 Young people who have been eligible for free school meals (FSM) in the past six years, who have been in care or who have been adopted from care.
54 House of Commons Library, Unemployment by ethnic background, , 28 September 2021
57 (Sir Kevan Collins)