By Richard Johnstone | 6 February 2012
Youth unemployment represents a ‘time bomb’ under the nation’s public finances and could cost the government £28bn over the next ten years, a voluntary sector review has found.
The Commission on Youth Unemployment, chaired by Labour MP and former foreign secretary David Miliband, warns that joblessness among young people has reached crisis level in 600 ‘hot spot’ areas.
Miliband said the country faced ‘a youth unemployment crisis we cannot afford’. The total cost to the Treasury of supporting the 1.5 million young people who are not in employment, education or training (Neet) will be £4.8bn in 2012, he said. The total lost economic output caused by youth unemployment is put at £10.7bn.
A report published today by the commission, which was set up last September by the Association of Chief Executives of Voluntary Organisations, calls for action in several areas. It recommends expanding eligibility for the government’s Work Programme and a guaranteed part-time job for young people who have been on the programme for a year.
It also wants the government to frontload its planned £1bn Youth Contract, which aims to provide almost 500,000 new apprenticeships and work experience placements over the next three years. This should be expanded in scope in the current year to ensure that opportunities are available to deal with the unemployment ‘emergency’.
The report calls for a national programme to prevent people from becoming Neets by providing localised education-to-career support for young people not attending university. This should include a mentoring scheme, where under-25s who have been in work for a year mentor others on their path to employment.
The 600 hot spots cover 152 local authorities across Britain where the proportion of young people claiming Jobseekers Allowance is double the national average. In these places, the report has also called for local organisations to pool resources to get young people into work in Youth Employment Partnerships.
Miliband said the recommendations were affordable and could be met by making better and more co-ordinated use of ‘the huge sums’ already spent on Neets.
‘The 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 route map 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.’
Fellow committee member Jonathan Portes, director of the National Institute of Economic and Social Research, added that the report ‘illustrates the magnitude of the potential long-term economic and social damage that might result from the current levels of youth unemployment’.
He said: ‘Not only is youth unemployment costing us billions now, but the damage done to the future employment and earnings prospects of those affected will cost us billions for years to come, every year, long after the economy as a whole has recovered. The report presents practical proposals to stop that happening.’
A Department for Work and Pensions spokeswoman said that reducing youth unemployment is ‘a clear priority’ for the government.
She added: ‘Following on from the tailored support of the Work Programme, the £1bn youth contract announced in November will ensure that young people receive the help, training and skills they need to enter the work place. Departments are working together to ensure they create the right support for young people from school through to further and higher education and employment.’
