Youth unemployment is a £28bn “ticking timebomb” under the UK economy, according to a new report by the Commission on Youth Unemployment. With one in five young people not in employment, education or training and a quarter of a million unemployed for over a year, the commission, chaired by David Miliband MP, says youth unemployment is not only one of the greatest human challenges facing the country, it represents a major financial threat.
Youth unemployment – the crisis we cannot afford identifies hotspots across Britain where youth unemployment has reached emergency levels. In these 600 areas, covering 152 local authority areas, the proportion of young people claiming Jobseekers Allowance is double the national average. The commission, chaired by David Miliband on behalf of
ACEVO, the charity leaders’ body, makes practical recommendations on what can be done to make Government’s ambition of abolishing long-term youth unemployment achievable. New research in the report shows that current levels of youth unemployment will cost the public purse at least £4.8 billion in 2012 and its scarring effects will cost £2.9 billion a year in the future. The net present value of the wider costs to the Treasury, even looking only a decade ahead, is £28 billion.
The report tackles the two challenges behind the headlines: the current crisis of rocketing youth unemployment driven by low levels of demand for young people’s labour, and Britain’s long-standing structural youth unemployment problem. The report calls for emergency action and a rethink in how we put existing resources to work more effectively.
Recommendations include:
- Ensuring more job opportunities are available to young people in 2012 by frontloading the Government’s Youth Contract initiative and doubling the number of job subsidies available in 2012.
- ‘First step’ – a part-time job guarantee for young people who have been on the work programme for a year without finding a job.
- Targeting young people earlier – A new national programme, Job Ready, to work with teenagers to prevent them becoming NEET in the first place.
- Providing localised education-to-career support for the non-university bound who are fast becoming the forgotten 50 per cent.
- Youth Employment Zones – starting in the youth unemployment hotspots, local organisations should come together and pool resources to get young people into work, with Whitehall offering additional support in the form of extra freedom and flexibility in return for results.
- A new mentoring scheme for young people, by young people: where under-25s who have been in work for a year mentor others on their path to employment.
David Miliband said: “Britain faces a youth unemployment emergency. This is a crisis we cannot afford. Government have set the right goal – abolishing long-term youth unemployment - but we will need big change if we are to achieve it.
“Young people, Government, communities and employers will all need to up their game if young people are to succeed in a radically changing jobs market. “Our report sets out a practical routemap for how they can do precisely that. The crisis of youth unemployment can and must be tackled now. With action we can make a real difference across Britain.”
Baroness Stedman Scott, Commission member and chief executive of charity
Tomorrow’s People said: “Finances are tight, but our report shows how – with imagination and intelligence – we can use the money available to change the minefield that many face when they leave school to a smoother path to employment, independence and security.” ACEVO chief executive Sir Stephen Bubb added: “Youth unemployment has been a burning issue for voluntary sector leaders for years now.
The current numbers only serve to reinforce that concern. Charity CEOs are ready and willing to be a key part of the solution, but we need Government and the private sector to work with us. The current crisis will only be solved if we see this as a priority for us all.”
Ends
The Commission on Youth Unemployment was set up in September 2011 by ACEVO (the Association of Chief Executives of Voluntary Organisations), in response to widespread concern amongst voluntary sector leaders about youth unemployment.
The Commission was chaired by Rt Hon David Miliband MP. The other members of the Commission were: Baroness Stedman-Scott (CEO, Tomorrow’s People), Prof. Paul Gregg (University of Bath), Katherine Kerswell (whose career in local government has included chief
executive roles in four councils), and Jonathan Portes (Director, National Institute for Economic and Social Research).
ACEVO (Association of Chief Executives of Voluntary Organisations www.acevo.org.uk) is the professional body representing charity and not-for-profit sector chief executives in the UK, with over 2,000 members. The broad not for-profit sector now employs the full-time equivalent of 1.5 million staff, with a collective annual turnover of £46bn.
