Skills for every young person Contents

Skills for every young person

Chapter 1: Introduction

1.Youth unemployment58 has long blighted UK society. Its drivers are many, complex and fiercely debated. Skills gaps and shortages, and global economic shifts have led to falling productivity relative to other economies, while rapid technological advancements have increased pressure on businesses. Equally, awareness of climate and sustainability issues has projected the green economy into the forefront. In the last few years, Brexit has exacerbated pressure on the jobs market and skills demands in several sectors.

2.More recently, young people bore the brunt of the initial economic impacts of the COVID-19 pandemic; one in three young people were furloughed compared to one in six adults.59 Sectors that disproportionately employ young people, such as hospitality and the creative industries, were hit particularly hard. Young people in England saw significant disruption to their education, training, work experience and social development, losing 115 days of face-to-face learning.60 By summer 2021, disadvantaged61 pupils were an additional two months further behind in reading than their more advantaged peers, while pupils in the north of England suffered more learning loss than in the south.62

3.Today 800,000 young people (12.6% of 16 to 24-year-olds) are neither working nor in full-time study.63  631,000 (9.3%) are not in any form of education, employment or training (NEET).64 475,000 (7%) are unemployed and 163,000 (2.4%) of them have been unemployed at least six months. And 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.65

4.The overall youth unemployment rate66 is 11.7%, although this figure can vary significantly between and within regions.67 For example, in London the youth unemployment rate between July 2020 and June 2021 was 21.9% (up from 14.6% in the same months of 2018–19), while in Yorkshire and The Humber it was 12.5% (up from 11.3%).68 It can also vary between different groups of young people. Young black people faced unemployment rates of 41.6% during the winter of 2020 (up from 24.5% pre-pandemic), compared to 12.4% among young white people (up from 10.1%).69 The UK’s youth unemployment rate also fares considerably worse in comparison with other OECD countries (see Figure 5).70

5.The conclusion of the furlough scheme not long before the publication of our report means the economy is now in a post-pandemic transition. During this period, it is critical that the needs of young people are at the forefront of our thinking. If we fail to address youth unemployment now, the impact of unemployment will endure. Young people who spend long periods of time unemployed earn less and are likelier to be unemployed in future. This is known as ‘scarring’.71 They may face greater chances of physical and mental illness.72 Furthermore, in March 2021 it was estimated that youth unemployment could incur an estimated £10 billion in costs for the wider economy in 2022 due to lost productivity and tax revenue, and additional welfare costs.73

Figure 1: Estimated cost of youth unemployment in 2022

Graphic showing cost of youth unemployment and fiscal cost due to tax loss and higher benefit spending

Source: Prince’s Trust, Learning and Work Institute, HSBC, Facing the future: Employment prospects for young people after Coronavirus (March 2021): [accessed 10 November 2021]

6.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 pre-pandemic.74 One young graduate told us of their “heartbreak” at facing rejections after competing with people who were made redundant.75 Graduates who are unemployed are less likely to earn the threshold to pay back their student loan, which could lead to a national student loan debt exceeding £140 billion.76

7.In light 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, and to make recommendations. 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.

8.We recognise ‘youth’ as persons between the ages of 16 and 24, as defined by the Office for National Statistics (ONS), unless stated otherwise. A further series of definitions frequently used in this report can be found in Appendix 4.

9.A call for written evidence was issued in March 2021 and we also invited people to share their views with us via other channels such as video and WhatsApp. We also held 23 meetings in which we spoke to youth organisations, employers, education and training providers such as schools and colleges, think tanks, academics, charities and membership groups. We held two evidence sessions with Government ministers, in which we questioned the Minister for Apprenticeships and Skills (then Gillian Keegan MP and since renamed Minister for Skills), the Minister for School Standards (then the Rt Hon Nick Gibb MP), and the Minister for Employment (Mims Davies MP).

10.We were particularly keen to hear and emphasise the voices of young people. We held four meetings, during which we spoke with some young people who had experience of unemployment, as well as representatives from the organisations that support them. In the first, we heard from young representatives from across the country; in the second and third we heard from young people in the East Midlands and in the Bolton and wider Lancashire area respectively; and in the final meeting we focused on young people from ethnic minority backgrounds based in and near London.

11.We are grateful to all who took the time to contribute to our inquiry, and particularly to the young people who shared the benefit of their experiences and views. Their contribution was of the highest importance to us and was a hugely positive influence on our report.

12.We would also like to thank our specialist advisers, Dr Kathleen Henehan and Olly Newton, who gave us invaluable support, advice and guidance throughout our inquiry.

Key themes and report structure

13.Despite debate around the drivers of the UK’s high youth unemployment rates in comparison both to the wider population and internationally, there are a few points of broad consensus as to where the biggest challenges lie, and it is on these areas that our report will focus:

14.The following chapters will explore these themes in detail. The remainder of this introductory chapter focuses on key youth unemployment statistics, as a means of setting the context for our report.

Key statistics

Table 1: Labour market status of young people aged 16 to 24, Q2 2021

% of population, by age; Q2 2021











Full-time students

Employed w/training











Employed w/out training

































Non-full-time students

Employed w/training











Employed w/out training












































Total not in full-time education or work-based training











Source: Office for National Statistics, ‘Labour Force Survey’:!/abstract [accessed November 2021]NB. Training refers to individuals who reported having received any work-related training within the previous 3 months. Training may vary significantly in type and quality.

15.Table 1 shows that in Q2 2021, 21.8% of young people aged 18 were not in full time education or employment with training. They might be in work without training or may be not in education, employment or training (NEET). These young people are very likely not to be obtaining the skills necessary to achieve fulfilling lives and livelihoods.

Figure 2: Proportion of 18-year-olds not in full-time education or work-based training, Q2 2021

Graphic showing percentage of 18 year olds not in education or work based training

Source: Office for National Statistics, ‘Labour Force Survey’:!/abstract [accessed November 2021]

16.Work that does not include training tends to be precarious in nature. Young people are most likely to be in this kind of work, often in jobs characterised by zero hours contracts. Latest ONS figures show that the recent rise in job vacancies has been driven in part by an increase in part-time work and the number of young people on zero hours contracts (the share of 18 to 24 year olds on zero hours contracts rose to 3.1% in July to September 2021, higher than the pre-pandemic figure of 3%).79 These jobs saw an increase during the pandemic (the proportion of young people on zero hours contracts as their main job peaked at 10.8% in April to June 2020).80 Even so, young people were not cushioned from redundancy by this growth; more than a third (36%) of young people in insecure work lost their jobs during the pandemic.81

17.The NEET measure is complex as it captures disparate groups of people including carers, recent graduates or those not looking for work. It ignores the number of young people who are in employment without training and ‘hidden NEETs’ who are not registered with a jobcentre, not claiming benefits, and therefore not recorded as NEET.82 Finally, it masks the differences between different groups of young people. Between 2017 and 2019, young people from a Pakistani ethnic background had an average NEET rate of 14.3%, while those from Indian and Chinese backgrounds saw rates of 7.3% and 4.5% respectively.83 During the COVID-19 pandemic, the NEET rate peaked at 11.8%; by comparison, in 2011 following the financial crash, it reached 16.9%.84

18.Recent NEET figures are the lowest since records began in 2001. This may be due to decreasing numbers of young people in the population or because more young people are in education. Of all 18-year-olds in England in 2021, 34.7% are set to start a degree course this year, an increase from 30.4% in 2020. 326,180 students in total (up 10%) were accepted into a full-time undergraduate HE course, of which 210,850 are 18.85

Figure 3: NEET young people aged 16 to 24 in the UK between April and June 2021

NEET young people aged 16 to 24 in the UK between April and June 2021

Source: Office for National Statistics, ‘Young people NEET, UK: August 2021’: [accessed 26 August 2021]

19.Some young people who are NEET will be defined as unemployed because they are looking for work. The most recent figures show an unemployment rate of 11.7% amongst 16- to 24-year-olds (475,000 people) compared to a pre-pandemic rate of 11.8% in December 2019 to January 2020. Looking at unemployment in comparison to the entire youth population, around 7% of all 16- to 24-year-olds in the UK were unemployed.86 These figures do not account for the end of furlough. For context, following the financial crash in 2011, youth unemployment reached 21.9% (1 million young people).87 In the early 1980s it reached just under 20%.88

20.During the pandemic, the rate of youth unemployment reached 14.8%.89 However, the Resolution Foundation estimated a rate closer to 20% for 18- to 24-year-olds.90 The rate also varied for different groups of young people; in April to June 2021, unemployment rates were highest for young black people (36%), and those who were from Bangladeshi or Pakistani backgrounds (22%), while for young white people the rate was 13%.91

Figure 4: Youth unemployment for young people age 16 to 24 in the UK between July and September 2021

Youth unemployment for young people age 16 to 24 in the UK between July and September 2021

Source: Office for National Statistics, ‘Labour market overview, UK: November 2021’: [accessed 16 November 2021 and House of Commons Library, Youth unemployment statistics, CBP 5871, 16 November 2021

21.The UK’s youth unemployment remains poor in comparison to some other comparable countries. Between April and June 2021, the Organisation for Economic Cooperation and Development (OECD), put the UK’s youth unemployment rate (then around 13.1%) higher than several other economies (see Figure 5).

Figure 5: Youth unemployment rates (%) in OECD countries, Q2 2021

Bar chart showing youth unemployment rates in OECD countries

Source: OECD, ‘Short-term labour market statistics’ : [accessed 9 November 2021]

22.In England, young people are allowed to finish compulsory education or training at age 18. They go on to a range of destinations (see Figure 6), with the majority going on to HE. We have chosen to focus our report on those that do not take this path.

Figure 6: Destinations of 18-year-olds at the end of compulsory education or training in England in 2019/20

Source: DfE, ‘16-18 destination measures’: [accessed 9 November 2021], Institute for Fiscal Studies, 2020 annual report on education spending in England (November 2020), p 142: [accessed 10 November 2021]and Institute for Fiscal Studies, Further education and sixth form spending in England (18 August 2021), p 2: [accessed 18 August 2021]

NB. Sustained destination means someone was in that position for 5 out of the 6 months during which data was collected. Data cover England.

23.Comparing rates of funding for each route is highly complex. Generally, funding per student in FE is calculated for those aged 16–18, whilst those over 20 would be included within adult education spending. Furthermore, spending varies by the different types of courses adults choose to take; for example, a level 4 engineering apprenticeship is more expensive than a level 2 English course (a breakdown of qualification levels is given in Appendix 9). This makes comparing HE and FE funding for people of similar ages difficult. As noted, spending on adult education overall is 50% lower than in 2009–10. Total spending on adult education and apprenticeships combined is around 35% lower than in 2009–10 in real terms.92

Figure 7: Spending at different stages of education (2020–21 prices)

Line graph showing spending at differen t stages of education

Source: Institute for Fiscal Studies, 2020 annual report on education spending in England (November 2020) Figure 6.1: [accessed 10 November 2021]

24.In the following chapters, we will explore the key themes as set out above in more detail.

58 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.

59 Resolution Foundation, Young workers in the coronavirus crisis (19 May 2020), p 1: [accessed 28 September 2021]

61 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.

62 Department for Education, Review of time in school and 16 to 19 settings, (November 2021): [accessed 10 November 2021]

63 Written evidence from Office for National Statistics (YUN0085)

64 Office for National Statistics, ‘Young people not in education, employment or training (NEET), UK: August 2021’: [accessed 10 November 2021]

65 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, CBP 5871, 16 November 2021

66 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.

68 Office for National Statistics, ‘Labour market in the regions of the UK: November 2021’ Tables H107, H103: [accessed 17 November 2021]

69 National Audit Office, Employment Support: Department for Work and Pensions (7 June 2021), p 14: [accessed 10 November 2021]

70 House of Commons Library, Youth unemployment statistics, CBP 5871, 12 October 2021

71 Written evidence from the Youth Employment Group (YUN0029)

72 Written evidence from Health Foundation (YUN0045). See also written evidence from National Youth Agency (YUN0016) and Health Foundation, ‘Living in poverty was bad for your health long before COVID-19’: [accessed 10 November 2021] .

73 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].

74 Institute for Fiscal Studies, Job opportunities during the pandemic (20 September 2021), p 14: [accessed 10 November 2021]

75 Engagement session with young people from ethnic minority backgrounds, 6 July 2021 [see Appendix 5].

76 Written evidence from the Association of Graduate Careers Advisory Services (YUN0001). See also House of Commons Library, Student loan statistics, CBP 01079, 23 June 2021.

77 NB. This is not the same as the unemployment rate as it is a measure of all people in that age category who are unemployed.

78 A person is economically inactive if they are not employed, nor have they actively sought work in the last four weeks and/or are not available to start in the next two weeks (so are not ‘unemployed’).

80 Written evidence from Professor Francis Green, Dr Golo Henseke, Dr Hao Phan and Professor Ingrid Schoon, University College London (UCL) Institute Of Education (YUN0011); Office for National Statistics, ‘Coronavirus and changing young people’s labour market outcomes in the UK: March 2021’: [accessed 10 November 2021]

81 Resolution Foundation, Double trouble, Exploring the labour market and mental health impact of Covid-19 on young people (13 May 2021), p 31: [accessed 10 November 2021]

82 The claimant count measures how many people claim unemployment-related benefits such as Universal Credit (UC) or Jobseeker’s Allowance (JSA). In September 2021, the number of benefits claimants was 58% higher than in March 2020. See Office for National Statistics, ‘CLA02: Claimant Count by age group’: [accessed 10 November 2021]. Note figures are seasonally adjusted.

85 UCAS, ‘Record number of students accepted into their first choice of university’, 10 August 2021: [accessed 10 November 2021]

87 ‘Youth unemployment hits 1 million’, The Guardian (16 November 2011): [accessed 10 November 2021]. Note that different calculation methods were used in 1984.

88 Written evidence from Professor Jonathan Wadsworth (YUN0046)

89 House of Commons Library, Coronavirus: impact on the labour market, CBP 8898, 13 October 2021, pp 5–6 and 18

90 Resolution Foundation, Jobs, Jobs, Jobs (27 October 2020), p 6: [accessed 10 November 2021]

91 House of Commons Library, Unemployment by ethnic background, Research Briefing Number 6385, 28 September 2021

92 Institute for Fiscal Studies, 2020 annual report on education spending in England (November 2020), pp 93–94: [accessed 10 November 2021]

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