YOUTH FUTURES FOUNDATION – WRITTEN EVIDENCE (YUN0022)

Youth Unemployment Committee inquiry

Youth Futures Foundation is an independent, not-for-profit organisation established in December 2019 to improve employment outcomes for young people from marginalised backgrounds who face complex barriers. Following the principle of “nothing about us without us”, youth voice is woven throughout every element of our work. Our Future Voices Group (FVG) are young people from marginalised backgrounds with lived experience of facing barriers to employment. They help shape our strategy and lead our mission and fed into this response. We are also a founding member and co-chair of the Youth Employment Group.

1. What are the main challenges facing young people seeking employment today? How do structural factors impact youth unemployment, and how might these be addressed?

1.1 The pandemic has been a perfect storm for youth employment rates: weak hiring demand for young people in areas of the economy where young people are disproportionately employed (i.e. hospitality and retail), extra competition for new jobs because so many people have been forced out of work, and recruiters looking for people with more experience than those leaving education. Up to 800,000 young people leaving education are finding that firms cannot afford to hire extra staff. Particularly, those with no experience and those young people who were working during the lockdowns are likely to be first out if redundancies are made. Furthermore, the first lockdown came into force just before the summer when recruitment is usually strong.

1.2 The pandemic has created additional barriers for young people from marginalised backgrounds. Too many young people are prevented from finding sustainable work by a lack of access to appropriate information, advice and connections, inadequate support to overcome multiple layers of disadvantage, or because of discrimination. Research carried out by the Institute for Employment Studies (IES)[1] found that under 24-year-olds account for almost half of the total fall in employment since the crisis began, with those from ethnic minority backgrounds disproportionately affected. Young people account for 46% of the overall fall in employment, with the fall in employment four times higher for young Black people and nearly three times higher for young Asian people. The rollout of the Kickstart scheme has also been impacted by the most recent lockdown. There is a growing risk that if it is not renewed, employers will be unable to use it to its full effect.[2]

1.3 These challenges were echoed by our Future Voices Group, with one member commenting that “the main challenge faced by young people is lack of experience due to lack of connections,” and another highlighted that “discrimination based on race, disability or age” is a key challenge with “employers assuming if you’re young, you’re less able.” Another highlighted that there was lack of “knowledge of different entries into industry (e.g. apprenticeships)”. There are also issues around skills mismatches in local labour markets.

1.4 The fragmentation of the youth employment system, at the national and local level, needs to be addressed. As co-chair of the Youth Employment Group, we are calling for the whole system to work better for young people, particularly those who face the greatest obstacles to finding a meaningful and sustainable job. Cross-government coordination and transparent reporting is essential. No minister or government department currently has overall responsibility for youth employment. We believe that a Cabinet Office taskforce, shaped by the voices of young people from marginalised backgrounds, should be established to raise this issue to the highest levels and coordinate the necessary provision.

2. What are the main challenges facing employers in the labour market today? What barriers do they face in recruiting young workers and setting up apprenticeships and traineeships?

2.1 Employers report that the policy landscape is very complex and creates barriers to engagement, particularly for SMEs. There are a confusing mix of different employment initiatives and, particularly in the current environment, employers can lack the time and capacity to navigate the system. They are concerned for their own survival and maintaining the jobs of their existing workforce. Employers tend to be averse to risk during challenging economic times and, if they are hiring, are more likely to choose more experienced candidates.

2.2 The lack of connectivity between education and employers is also a challenge.  Businesses report that young people being ‘work ready’ remains a priority for them, yet two in five (40%) say that they are dissatisfied or very dissatisfied with the wider character, behaviours, and attributes of young people. One third (33%) are either dissatisfied or very dissatisfied by the amount of relevant work experience young people have.[3]

3. What future social, economic and technological changes are likely to impact youth unemployment? What impact might these changes have, and how should this be planned for and addressed?

3.1 Young people who spend lots of time unemployed or between jobs are more likely to rely on the benefits system later in life. They are also more likely to be forced to take low-paid/low-quality work that can affect their self-esteem and overall wellbeing.

3.2 In a study of the NCDS, Gregg and Tominey (2004) concluded that youth unemployment imposes a wage scar of 12-15% by the age of 42. However, this falls to 8-10% if people manage to avoid repeatedly becoming unemployed in their 20s. One of the underlying causes appears to be poor wage recovery after each period of unemployment.

3.3 Young people often stay in full-time education to avoid becoming unemployed in periods of poor economic growth. There is a risk that as the economy reopens young people will be forced into taking jobs that they are overqualified for, so a reduction in youth unemployment could mask an increase in youth underemployment. Plus, those who were furthest from the labour market before the pandemic may not benefit equally from the recovery.

3.4 The long-term impact of the pandemic on retail and hospitality, which traditionally offer a high proportion of entry-level jobs to young people, is yet to be seen. There is a chance that, with an ageing population, there may be opportunities for young people to take work in the health/social care sector. However, it should be noted that social care is widely low paid with low progression.

3.5 Other economic changes likely to impact youth unemployment include:

• The end of the furlough scheme. This could mean extra competition for jobs if permanent staff are laid off by downsizing companies
• The economy shrank by 10% during the pandemic so there are fewer jobs available
• Long-term unemployment in the under-25 age group has accelerated during the pandemic. Pre-lockdown, 750,000 young people were NEET (not in education, employment or training) in the UK. Latest ONS statistics from April show that of the annual fall in employment, 436,000 (54%) were under 25 years of age, and long-term unemployment continues to grow among this group.
• Brexit is also likely to have an impact on different sectors[4]

3.6 Young people could face technological barriers to employment because as we move towards increased automation, opportunities for some jobs many decrease. Similarly, technological training is often geared towards more senior staff, which leaves younger or new employees lacking the skills they need to progress their career. The digital poverty divide can also prevent young people from marginalised groups from accessing job or work experience opportunities. Even for those who do have access to the internet, the efficacy of online work experience is not clear. We recommend that the effectiveness of online work experience placements is reviewed and, where possible, employers are encouraged to retain face-to-face opportunities for those facing disadvantage.

3.7 To try to address some of the changes outlined, we recommend:

• Regarding Kickstart:
• Extend Kickstart beyond Dec ’21
• Focus on ‘work capable’ rather than ‘work ready’ and expand criteria beyond UC recipients
• Target young people from marginalised backgrounds 
• Focus on quality of opportunity and support
• Releasing emergency funding for the Department for Work and Pensions to enhance Jobcentre Plus capacity to deliver mainstream services at greater scale and to commission targeted interventions, ensuring funding is spent to meet need.
• Re-directing funding from a phased wind-down of the Job Retention Scheme, to support youth-focused retraining programmes and assistance switching sectors for those on furlough or made redundant.
• Reforming the apprenticeship levy to enable employers to spend it on pre-employability support and prioritise new starters over existing employees (more detail in answer to Q10)
• Promoting the Enterprise Adviser Programme to help young people learn about job opportunities
• Focusing on developing youth employment in growth sectors like IT, FinTech, AI, green jobs, the IoT and programming

4. Is funding for education, training and skills enough to meet the needs of young people and of the labour market? How can we ensure it continues to reach those who need it most?

4.1 We do not feel that the funding going to colleges or to schools to deliver careers education is sufficient. A report from Careers England in association with NAHT and the WorthLess? Campaign (2019) showed that despite schools now recognising the vital importance of careers provision, they are unable to deliver this due to a lack of funding, with 75% of schools saying that they have insufficient, little or no funding. 

4.2 There are big equality gaps in NEET rates and employment by ethnicity, gender and geography. It is hard to see how current funding is weighted towards levelling up based on factors in addition to geography. We would like to see further funding for Youth Hubs and incentives for apprenticeships and traineeships weighted towards young people from marginalised backgrounds (see Q10 for more details.)

4.3 Policymakers should also prioritise coherent and connected pathways into employment for young people, above funding.

5. Does the national curriculum equip young people with the right knowledge and skills to find secure jobs and careers? What changes may be needed to ensure this is the case in future?

5.1 Employer surveys often state that they look at soft skills above qualification. Yet, as one member of the FVG commented, “PSHE and practical life skills, such as coding, languages, coaching, adaptability, etc., need to be more of a consistent and heavy-duty part of the curriculum.” Employers should be involved in broad curriculum development, in addition to their key role in careers advice, to ensure that key employability skills are embedded throughout the curriculum and not just an ‘add on’.

5.2 A member of the FVG commented that “for the most part schools don't talk much about education and employment. Often they briefly introduce their students to certain jobs but there is very little talk about the required skills and qualification for those jobs and what someone’s path into them may look like. There isn't much on CV writing and interviews and therefore young people often find that they lack the knowledge of what employers and the job market requires… to have a successful journey into meaningful employment. They mainly focus on the subjects they teach and very few useful life skills to sustain the young people in their journeys going forward.”

5.3 The need for schools to develop broad skills such as CV building, interview skills, and resilience to deal with rejection were also highlighted by the FVG. Many young people felt that teachers and career advisers sometimes held them back through assuming they would follow a particular path and not offering all the alternatives.

5.4 There is some great work happening in this area, such as the Skills Builder Partnership, a recipient of a grant from our Infrastructure Resilience Fund. It aims to equip young people with the skills, aspirations and experiences they need to succeed in life through programmes to help teachers. It uses the Skills Builder Universal Framework to build essential skills at every stage of life and learnings from this programme should help inform curriculum change.

6. Is careers education preparing young people with the knowledge to explore the range of opportunities available? What role does work experience play in this regard?

6.1 For disadvantaged young people at risk of low attainment and lacking the social capital to navigate an increasingly complex and competitive employment market, access to high quality career advice, experience of the workplace and the opportunity to develop soft skills is essential.

6.2 We have been told on numerous occasions that a ‘one size fits all’ approach to careers advice and guidance will not work. The government cannot assume that a single structure (particularly at a national level) will be able to accommodate the enormous variation in young peoples’ goals and ambitions, particularly those from less advantaged backgrounds, as well as ethnic groups who may require additional support and information relative to their peers to address ‘information gaps’. This is echoed by feedback from our FVG:

• “Education doesn't meaningfully connect young people to opportunities locally/regionally/nationally and doesn't inform about requirements/routes and alternative pathways. If this careers advice is done I've found it to be rushed, informal and laissez faire classes where the class browses prospects or another site to look at different careers. Given most young people get their careers advise from friends and family, largely from same area, same socio-economic backgrounds, how can  people meaningfully get educated and prepare themselves early on for a particular career or sector unless it's one that people from their family/community/friends etc. are directly involved in?”
• “The sixth form college I went to pushed university for those on A Levels, I didn't even hear about apprenticeships available and didn't have any opportunity to look into them in my own time.”
• “Opportunities such as freelancing/entrepreneurship should be presented as viable/equal opportunities alongside 'traditional jobs.”

6.3 The issue of variable provision within alternative provision settings was also raised by a member of the FVG: “These settings don't seem to provide the same careers advice or support as mainstream schools do, which puts these students at a disadvantage to others who attended mainstream schooling. They do not teach you how to handle the transition from alternative education to mainstream college and large workplaces, which I think they should in order to give these students the confidence to settle back into mainstream settings.” Similarly, one member of the group who was home-schooled highlighted that “There is no careers education if you're home-schooled and no school which did have careers education would let me attend because of my mental health issues.”

6.4 The removal of Connexions has left a gap in joined-up support for young people accessing careers, learning, specialist and employment support. Timely, face-to-face guidance for young people at transition points is needed, as well as for those who have lost their qualification choices due to COVID. There is a need for clarity around who holds responsibility for supporting the transition from education to employment, since it is currently not very joined up. Local authorities must ensure that there is a suitable offer for each young person leaving compulsory education and are responsible for ensuring this is taken up. However, they are not held to account on this. Youth Hubs could provide an opportunity for better connectivity between services.

6.5 The FVG had the following reflections on work experience:

• “My non selective state school did not offer work experience. They told us that we had to get it ourselves. I wrote to 7 law firms and was rejected. I got no work experience.”
• “Attending a pupil referral unit meant we essentially weren't given the trust to carry out work experience, so for me it was a matter of just getting lucky with my first job to get the experience.”
• “I have faced discrimination while doing work experience. Often employers do not understand the needs of those with disabilities. This can mean that navigating the work place can be arduous and humiliating for those with disabilities.”

10. What can be done to ensure that enough apprenticeship and traineeship placements are available for young people? Is the apprenticeship levy the right way to achieve a continuing supply of opportunities?

10.1 As co-chair of the YEG, we have the following recommendations regarding apprenticeships for young people:

•         Make the £3,000 employer incentive more generous for young people than adults (e.g. £5,000 for 16-18s or 19-24s with an Education, Health and Care plan or a history of being in care; £3,500 to any employer who takes on an apprentice aged 19-24)

•         Abolish employer co-investment for SME’s (<250 employees) if the apprentice is under 25 (currently 5% co-investment often required)

•         Introduce a 10% co-investment rate for apprentices aged 25+

•         Remove Level 7 apprenticeships from the scope of the levy to free up significant funds for young people

•         Allow employers to re-allocate up to 10% of their levy contributions towards approved pre-apprenticeship programmes such as Traineeships and rigorous VCSE schemes

•         Trial new ways of enabling employers to recruit and support disadvantaged apprentices (e.g. bursaries for recruiting learners with low or no qualifications, extra funding for outreach / apprentice travel costs / providing pastoral and academic support)

•         Rigorous enforcement of the ‘Baker Clause’ (with penalties for non-compliance) is essential for ensuring that all young people in schools and colleges are given fair access to information about apprenticeships

•         Revise the public sector apprenticeship target so that it focuses on recruitment of young and disadvantaged learners

•         Ensure that they are of consistent and high quality, e.g. despite minimum requirement of 20% off-the-job training, the 2020 DfE survey of apprentices showed that only 30% of apprentices report receiving formal training for at least 20% of their week, while 18% report receiving no formal training at all

10.2 Regarding traineeships, we believe that they should be targeted at young people from marginalised backgrounds and targeted by region based on need. There is also the opportunity to improve targeting by working effectively through Youth Hubs. Increasing the employer bonus from £1k to £2k could also help with take up. It is important that traineeships are evaluated to ensure that they are effective in helping young people on their journey to employment.

11. What lessons can be learned by current and previous youth labour market policy interventions and educational approaches, both in the UK and in other countries?

11.1 In German education, a dual system has been established to promote legally regulated cooperation between small and medium-sized companies and publicly funded vocational schools. Trainees in the dual system typically spend part of each week at a vocational school and the other part at a company. Dual training usually lasts up to three-and-a-half years. It provides excellent skill development and covers initial vocational education and training, further vocational education and training, careers, employability, occupational competence and identity. It has helped Germany achieve low youth unemployment and high skill levels.

11.2 Evaluation of the Talent Match programme[5] also highlights some key learnings:

• The involvement of young people in co-production of the programme improved the quality of service provided and increased the programme’s innovation and legitimacy
• The value of person-centred approaches and high-quality key-working relationships, were found to be crucial to initial and ongoing engagement
• Talent Match was an explicitly voluntary sector led programme; the breadth and influence of partnerships demonstrated that voluntary and community sector organisations are effective leaders of cross-sector partnerships
• Talent Match helped support participants to improve their wellbeing: 70 per cent of those who gained a job, and 60 per cent of those who did not, reported improved life satisfaction. Participants moving into work reported high levels of job satisfaction
• Talent Match had a test and learn ethos enabling programmes to be responsive and change the ways services and activities were delivered during their lifetime
• Young people were positive about the voluntary nature of Talent Match, which also enabled Talent Match to reach out to a more diverse range of young people
• Young people with often multiple needs continue to face significant barriers in entering employment, including low levels of wellbeing and poor mental health.
• Talent Match provides examples of how young people can be positively supported at a local level and confirms that this support for some needs to be provided over the long term

13. How might future youth labour market interventions best be targeted towards particular groups, sectors or regions? Which ones should be targeted?

13.1 Youth labour market interventions should target marginalised groups who are likely to experience the most barriers to employment. This includes young people from ethnic minority backgrounds who have poor labour market outcomes, disabled young people, SEN, carers, those with experience of the criminal justice system. They should also be regionally targeted at areas of highest need, i.e. where there are the highest proportion of NEETs, and targeted at sectors that have a large proportion of opportunities for young people.

13.2 These groups could be targeted through recruitment processes, careers education, mentoring, by JCP work coaches and outreach opportunities, as well as through financial incentives for employers. It is vital to involve young people in the process of designing future labour market interventions at national and local level to make them as effective as possible.

13.3 A summary from the Campbell Collaboration meta-analysis of interventions with young people (2019)[6] highlight the following factors associated with bigger positive impacts on employment outcomes:

• Adding complementary services to the main delivery
• Profiling: assessing degrees of need from minimal to most disadvantaged
• Ensuring participants stay in the programme
• Payment by results
• Involving all three of public, private & third sectors
• Tracking impacts over the longer term (they grow)
• Focussing more on disadvantaged young people

10th May 2021