Fall in youth unemployment due to more in full-time education

by Mark Corney

Much has been made of the fall by 9,000 in the number of unemployed 18-24 year olds.

Welcome news indeed but the presumption is they are in jobs. Nothing could be further from the truth as the number in employment also fell by 12,000.

So where have these 21,000 18-24 year olds gone?

16,000 more were economically inactive – without a job and had not looked for work – and

to complete the picture there are 5,000 fewer 18-24 year olds in the overall population

But the real story behind the figures is the continuing role of full-time education in reducing youth unemployment and inactivity.

Protecting spending on children and young people

by Mark Corney

Last week, I argued that the real story behind Budget 2012 for education and skills is how much of this part of our public services is expected to contribute to the extra real terms spending cuts of £6.5bn in 2015/16 and £10.5bn in 2016/17.

At the heart of these cuts is the battle between AME and DEL.  

Annually managed expenditure (AME) is revenue and capital spending that fluctuates with the economic cycle. Examples include debt interest and welfare spending. Departmental expenditure limits (DEL) is revenue and capital spending which can be managed over three years. Examples include most but not necessarily all spending on education and skills.

The Coalition could save the entire £10bn from AME or from DEL and, of course, a mix of both. Bearing in mind the state of the economy and the public finances, however, it is unlikely that ‘education and skills’ will be totally immune from further spending cuts.

A Budget for education

by Mark Corney

At first glance, Budget 2012 looks like a non-event for education and skills.

Apart from piloting enterprise loans for young people and an extra £100m for science facilities, the conclusion could so easily be drawn that this is not a budget for education and skills.

But this is a budget where the story lies in the ‘big picture’ rather than specific measures.

To appreciate how important this budget is for education and skills, time has to be spent on grappling with the difference between annually managed expenditure (AME) and departmental expenditure limits (DEL). 

The Budget Speech we’d like to hear

by Mark Corney

Mr Deputy Speaker, my Budget today announces far reaching reforms of our education, skills and employment systems.

I am determined to unleash the potential of our young people, prevent a lost generation of 18 to 24 year olds, transform training opportunities for adult workers and revitalise lifelong learning.

The Coalition Government is full-square behind the raising of the participation age to 18 in 2015. This will provide a step change in opportunities for all young people in England.

But by itself, the RPA will not ensure higher participation and greater achievement. We accept middle and lower income families facing cuts in real incomes and welfare benefits will find it harder to support their children to stay-on in education and training.

A New Deal for 16 and 17 Year Olds

by Mark Corney

These are hard times to increase participation in education and training by 16 and 17 year olds.

The new £42m a year programme for disengaged 16 and 17 year olds is a welcome step but well short of what is needed.

The Coalition must offer a new deal to 16 and 17 year olds in time for the start of the next academic year in September. 

A Budget for young people

by Mark Corney

The pressure on the Chancellor to deliver a ‘budget for growth’ is matched only by the need to craft a ‘budget for young people’.

Across the UK, 731,000 16-24 year olds are unemployed and ‘not in full-time education’. Another 713,000 are economically inactive and ‘not in full-time education’.

Compared to the autumn statement the fiscal outlook for the March budget is more positive. The deficit for 2012/13 could be £3bn lower than predicted.

Decisions to tax ‘wealth’ instead of’ income’ could also be good news for young people. For instance, ending higher rate tax relief to private pension contributions could save £7bn per year. 

A Budget for growth

The budget is four weeks away. The economy is set to zig-zag in and out of low growth throughout 2012. Pressure is mounting on George Osborne, the Chancellor, to deliver a ‘Budget for Growth’.

In the short-term, low growth is a symptom of low demand.

The ‘high’ politics of Budget 2012 is the choice between maintaining the present course and hoping demand from private companies and households will increase, and stimulating demand through tax-cuts and public spending funded through borrowing at the risk of higher interest rates.

But climbing up the political agenda is the question of how to increase long-term economic growth.