by Mark Corney
Wednesday's jobless figures will confirm that the
Coalition Government must go well beyond the Youth Contract to prevent another
lost generation of young people. The new, three year Youth Contract mainly for
18-24 year olds can only be a starter for ten.
To be fair, the Coalition is at least concentrating
on the correct group of 18-24 year olds.* Young people can be divided between
the employed, unemployed and the inactive. For each category, however, young
people can be in full-time education or not.
So in terms of unemployed 18-24 year olds, the
government is spot on to focus on the 525,000 in England who are out of work
and not in full-time education, and the 490,000 who are inactive and not in
full-time education.
On entering office, the Coalition pinned its hopes
on two measures to keep a lid on youth unemployment. For those on the higher
education track the number of full-time places would be broadly maintained so
that over 840,000 young people aged 18-24 could be in full-time HE at any one
time. For those on the jobs track who were not in full-time education but
claiming Jobseekers Allowance, the answer was the much heralded all-age Work
Programme.
As the jobs picture worsened through 2010 and 2011,
the Coalition increasingly turned its attention to expanding apprenticeships.
The HE lobby thought this to be terribly unfair. Expansion of apprenticeships
should go hand in hand with an expansion of full-time HE places.
Yet, this completely misunderstands the policy decision
the Coalition made because of the fiscal crisis. Apprenticeships trumped
full-time HE because they were cheaper not in terms of tuition and training but
in terms of financial support.
For full-time HE, the taxpayer funds living costs
in the form of maintenance loans and grants. For apprenticeships employers pay
living costs in the form of wages.
In the run up to the autumn statement last year, the
obvious point dawned on the Treasury and DWP that despite more apprenticeships
youth unemployment kept rising.
The explanation is that apprenticeship funding is allocated
to 18-24 year olds already in work rather than those on the dole.
And so the Coalition announced the Youth Contract
containing a battery of measures such as work placements for 18-24 year olds on
JSA for three months, weekly signing on from five months, wage subsidies and
apprenticeships for JSA claimants after nine months and mandatory participation
on the Work Programme thereafter.
Unfortunately, the number of unemployed and
inactive 18-24 year olds not in full-time education is over a million and is
set to climb throughout 2012.
The weak economy is forcing employers to cut the
jobs for 18-24 year olds not in full-time education. Traditional sectors who recruit
young people such as construction, retail and the armed forces are still
cutting back.
And while employment levels for the over 25s are
being protected by growth in self-employment - currently above 14% and more
than 4m – fewer than 5% are aged 18-24, some 133,000, and growth has been
limited.
Something beyond the Youth Contract is needed.
The debate over whether apprenticeships should be
for employed or unemployed 18-24 year olds will undoubtedly intensify.*
Developing a three month offer for unemployed 18-24
year olds through doubling the number of wage subsidies under the Youth
Contract, and creating a Part-Time First Step guarantee allowing JSA claimants
to take part-time jobs for up to a year as proposed by David Miliband and the Commission
on Youth Unemployment,*** each deserve detailed consideration.
But the fact remains both the Coalition and the commission
have focused on labour market interventions when jobs for young people not in
full-time education are still shrinking.
Labour market interventions need to be complemented
by education interventions.
The contribution of full-time education to reducing
18-24 youth unemployment is massive but rarely analysed.
Although over 840,000 18-24 year olds from England are
in full-time higher education only 265,000 are in full-time further education.
And while 165,000 18 year olds are in full-time further education only 100,000
are aged 19-24.
If full-time FE matched anywhere near the numbers
in full-time HE deep inroads could be made into the half a million unemployed 18-24
year olds not currently in full-time education.
But expansion of full-time FE for 18-24 year olds
seeking a first Level 3 requires a maintenance support system - divorced from Jobseekers
Allowance - in line with full-time HE students. Then, maintenance support could
become a trampoline into work for full-time FE students just as it is now for
full-time HE students.
Obviously, a new system of FE maintenance support for
18-24 year olds would have to be fair to the taxpayer as well as students. Grants
would be preferable but loans might be the only option.
And further expansion of full-time HE is also necessary. More young people could study full-time if a
proportion of the £2bn maintenance grant budget was turned into loans.
A strategy to expand full-time FE and HE could go
some way to help prevent a ‘lost generation’ of young people.
Mark Corney is policy adviser to the Campaign for Learning and writes in
a personal capacity
*Building Engagement, Building Futures, Pour
Strategy to Maximise the Participation of 16-24 Year Olds in Education,
Training and Work, HM Government, December 2011.
**The Economic Value of Apprenticeships, City &
Guilds, February 2012.
***Youth unemployment: the crisis we cannot afford.
ACEVO, January 2012
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