THE PRINCE’S TRUST – WRITTEN EVIDENCE (YUN0039)

Youth Unemployment Committee inquiry

About The Prince’s Trust

Youth charity The Prince’s Trust helps young people to develop the confidence and skills they need to realise their ambitions, so that they can live, learn, and earn. Founded by The Prince of Wales in 1976, the charity supports 11- to 30-year-olds who are unemployed, struggling at school and at risk of exclusion. The Trust has helped over a million young people to date, and in 2019/20 alone supported over 70,000 individuals.

Many of the young people helped by The Trust are in or leaving care, facing issues such as homelessness, mental health problems, or have been in trouble with the law. The programmes offered by the charity give vulnerable young people the practical and financial support needed to stabilise their lives, helping develop self-esteem and skills for work. Three in four young people supported by The Prince’s Trust move into work, education, or training.

The Prince’s Trust is also a founding member and co-chair of the Youth Employment Group which has submitted a collective response. The Youth Employment Group was established jointly by Institute for Employment Studies, Impetus, The Prince’s Trust, Youth Employment UK and Youth Futures Foundation in March 2020 and now has over 230 member organisations. The group was set up to respond to the escalating youth unemployment crisis facing the UK following the coronavirus pandemic, with a particular focus on disadvantaged young people’s engagement in education, employment or training. This individual response reflects the broader work and perspectives of The Prince’s Trust, as well as our own research.

This response:

Based on our experience of supporting young people into employment and our work with employers, schools and colleges across the UK, we make the following key points in this response:

 The impact of the pandemic on youth unemployment has been well-documented, but the medium to long term outlook is also concerning

 Immediate interventions must focus on preventing a generation of young people being disadvantaged by the pandemic…

 …but we must also put in place longer-term solutions to address the challenges that already existed – supporting all young people to thrive

 The education and skills system must focus on supporting young people to develop the broader personal skills and confidence they need to succeed

We also draw on recently published research reports from The Prince’s Trust in partnership with leading organisations:

Facing The Future: Employment prospects for young people after coronavirus, in partnership with Learning and Work Institute - available online here
Young people’s mental and emotional health: Trajectories and drivers in childhood and adolescence, in partnership with the Education Policy Institute – available online here.

The impact of the pandemic on youth unemployment has been well-documented, but the medium to long term outlook is also concerning

Before the crisis, levels of youth unemployment were low by historic levels at 11.8%, a percentage that has now reached 14.3% - their highest since 2015 [1]. While government interventions such as the Coronavirus Job Retention Scheme have helped to protect many jobs, young people have been disproportionately impacted by the pandemic in term of employment – with over half of the fall in employment among this group and the number of young people in employment now at its lowest since records began [2].

It is also worth noting that the fall in youth employment has not been distributed equally and statistics show that it is affecting the groups who were already disadvantaged before the pandemic the most. Findings show that BME young people are twice as likely to be unemployed than their white peers [3] whilst Black young people saw a 49% drop in hours worked compared to a 16% drop experienced by white young people during the pandemic [4]. It is therefore important to consider how the youth employment crisis is spoken about and how measures can be utilised to address the widening disadvantage gap caused by the pandemic. The pandemic has exposed and exacerbated existing inequalities, leading to a growing crisis in youth unemployment, as opposed to creating a new crisis in itself.

Economic modelling carried out in a report between the L&WI and The Prince’s Trust [5] shows that the cost of youth unemployment extends into the wider economy. The economic cost of youth unemployment, in terms of lost national output, is forecast to rise to £6.9 billion in 2022. Furthermore, the fiscal costs of youth unemployment, in the form of lower tax revenue and higher benefit spending, is forecast to be £2.9 billion in 2022. Finally, the long-running scarring cost to young people entering the labour market in 2021, in terms of lost earnings and damage to employment prospects, is forecast to be £14.4 billion over the next seven years. Whilst measures to solve the youth unemployment crisis will be costly, this modelling indicates that the cost of leaving them unaddressed is far more expensive- both to young people themselves and to the economy.

This research also suggests that youth unemployment is not set to peak until 2022 at 17.5%, with challenges persisting even as our economy – and overall unemployment – begin to recover [6]. This reflects the experience following the 2008 financial crisis, where youth unemployment did not peak until a number of years after the start of the crisis [7] – and underlines the need to act immediately to ensure that young people receive the support they need.

It is promising to see the economy set to recover even faster than initially anticipated [8], however whilst employment rises, young people continue to be the most disadvantaged relative to all age groups [9]. The struggle now is to create jobs and also to create promise. Some of the most concerning findings in the past year have revealed young peoples’ declining belief in their own prospects. The Prince’s Trust Youth Index found that 24% of young people felt that the pandemic had destroyed their career hopes, and 60% felt getting a new job is “impossible now”[10]. Other research on the impact of lockdowns has isolated the negative effects of social isolation during the pandemic from job related worries and found that job related worries were having a significantly larger impact on young people’s wellbeing than social isolation [11]. The longer-term impact on mental health will take some time to be seen, but the potential costs of this should not be ignored.

Immediate interventions must focus on preventing a generation of young people being disadvantaged by the pandemic…

There have been welcome interventions from government to support youth unemployment during the pandemic – with the Coronavirus Job Retention Scheme, Kickstart, Restart and apprenticeship incentives. But more work is needed in the short term to limit the damage that could be caused.

The beginning of the Kickstart programme was hampered by a national lockdown, meaning that it took longer than expected for employers to be able to offer places through the scheme – resulting in a very slow start. By late February, almost 4,000 young people had begun to benefit from the scheme, a number that is expected to rise dramatically as we see the economy reopen [12]. However, if we are to truly see the positive impact that this scheme could have, government must commit to its extension. By extending the programme for at least 6 months, this would give employers confidence to take part, ensuring that more young people can benefit from the opportunities on offer.

The recruitment of thousands of new work coaches is a good first step to ensure that everyone has access to the support needed to get them employment [13], but work is needed to ensure that they are ready and equipped to offer the tailored support that young people need. New ‘Youth Hubs’ – which The Prince’s Trust is a part of – should help to create a landscape where young people are able to access the support they need, even where they would not traditionally engage with JCP. Going forward, it will be important to ensure that these remain properly resourced, and that investment ensures these are in locations where young people will have easy access to their offering. It is also important to ensure that we focus on the training and support that work coaches receive – both those who are new to the role and existing staff – giving them the tools they need to offer young people high quality, relevant support to move them into employment. They should be encouraged to work with specialist youth sector organisations who have the experience and expertise that can really make a difference to individuals.

Work is also needed to stimulate job creation, ensuring that all young people can have access to high quality opportunities. One idea to explore here would be the waiving of Employer National Insurance Contributions (NICs) for under 25s. By reducing employment costs for young people, this would stimulate new hiring during a time where businesses and employers are being more risk averse- the targeted incentive would specifically support young people earlier on in their careers and combat the shortage of roles that are predicted for young people in the recovery. Other support could include a job guarantee to prevent growing long-term youth unemployment, which should create paid, at least at the minimum wage, employment opportunities for young people who have been unemployed for 12 months or who have been referred by their work coach or local partner – this could essentially act as a ‘Kickstart-plus’ for those young people who have not been able to secure a Kickstart role, having been unsuccessful through the recruitment process.

…but we must also put in place longer-term solutions to address the challenges that already existed – supporting all young people to thrive

While youth unemployment levels before the beginning of the pandemic were approaching historically low rates, these statistics masked a number of other challenges including stubbornly high levels of long-term youth unemployment. This has since been exacerbated by the pandemic, underlining the need for action. Worryingly, long-term youth unemployment has reached a five-year high, with 44% of all unemployed young people unemployed for at least six months (compared to 33% a year earlier)[14].

With a new cohort of school leavers due to increase competition in the labour market this September, coinciding with the end of the Job Retention Scheme, there is an urgency to supporting those who are both already long-term unemployed and on the cusp of long-term unemployment, to prevent a generation of young people languishing their skills and career development.

With Kickstart focused on supporting those who are more ‘work ready’, it is vital that other interventions are offering the support needed for young people who need more intensive interventions to get them ready to succeed in employment. We must avoid the risk that the focus is placed on those who are easier to get into work and more quickly ‘off the books’ of Job Centre Plus – leaving those who face additional challenges languishing out of work for even longer periods of time. The ‘Restart’ programme could play a role once fully established, but youth targeted interventions will be required for some time to come.

The Prince’s Trust has experience and expertise in supporting young people who face additional hurdles to moving into work, with 3 in 4 young people completing our programmes moving into a positive outcome following the course. We have continued to support young people throughout the pandemic and stand ready to help them develop the skills and confidence they need to progress to their next step.

As well as offering support to young people currently out of work, policy interventions should work to ensure young people are developing the skills that will help them to succeed in the labour market over the longer-term. Our recently published research looking at employment prospects for young people after coronavirus (carried out in partnership with the Learning and Work Institute and supported by HSBC UK) showed how young people are currently overrepresented in sectors forecast to see lower employment in the long term – highlighting a need for a focus on skills development to help them take advantage of the career opportunities available [15].

This research also highlighted the potential for new opportunities created by the commitment to Net Zero carbon emissions, with 35% of employers surveyed saying that this would create jobs in their sector – a figure which rose to 56% among those working in construction, and 51% among employers in IT and telecoms [16]. We need to ensure that young people are well equipped to benefit from these employment opportunities – which must include both high quality training opportunities and clear, effective careers guidance.

The research also shows that demand for employees with lower-level qualifications is projected to fall in the short, medium and long-term - raising concerns about the employment prospects of young people who lack higher level qualifications [17]. This underlines the importance of coherent and high-quality education options, particularly at levels 2 and 3, which can provide pathways to higher level skills and jobs – and apprenticeships should play a big role in this landscape.

The data shows a drop in the number of apprenticeship starts for young people, as well as at the lower levels that we know can provide an important first step onto the employment ladder. Analysis from FE Week [18] shows that the number of apprenticeships started by young people in 2018/19 had fallen substantially since 2014/15 – with a reduction of 25% in starts for those aged under 25 compared to 16% for those over 25. Between 2017/18 and 2018/19, starts for under 25s fell by 3%, whereas we saw an increase of 16% for over 25s. These figures show a significant shift in who apprenticeships are serving. Additionally, we see that in 2011/12, 63% of apprenticeship starts were at intermediate level, a figure that had fallen to 36% by 2018/19 [19] - further demonstrating the impact of changes to the system.

The pandemic has only served to intensify the challenges – with the lockdown period resulting in a disproportionate negative impact on apprenticeship starts for under-19s and intermediate level apprentices [20]. During the first two quarters of the 2020/21 academic year there was a drop of 18% in overall apprenticeship starts compared to the same period a year before – but a 33% fall in starts among those under 19. Intermediate apprenticeship starts also fell by 36% over this same time period, while higher level apprenticeships grew by 12%[21]. Action is clearly needed to ensure that apprenticeships remain a route to support the development of skills in young people.

Urgent intervention is needed to reverse this change. We propose a number of recommendations that could have a positive impact here including: allowing employers to spend up to 10% of their levy funding on pre-apprenticeship programmes to boost confidence in taking on young apprentices; increasing the current incentive payments to employers taking on young apprentices to £5000 for 16-18 year olds and £4000 for 19-24 year olds; and abolishing the co-investment requirement for apprentices under 25 for smaller employers operating outside of the levy system. We would be happy to provide more detail on any of these recommendations.

The education and skills system must focus on supporting young people to develop the broader personal skills and confidence they need to succeed

The impact of the pandemic on young peoples’ education is yet to be fully felt – but there has been substantial commentary on both their attainment and their mental health and wellbeing following these long periods of time out of school. Young people from disadvantaged backgrounds are expected to have lost out more in comparison to their well-off peers, with a number of sources suggesting that the ‘attainment gap’ may have widened over this period [22].

As such, it is right that the government is making funding available for ‘education recovery’, with the National Tutoring Programme and catch-up premium both welcome interventions. But it is vital that there is also a focus on the personal development that many young people will have missed out on over the last year.

This is emphasised in our recently published research with the Education Policy Institute (supported by Tesco), which examined the drivers of mental health and wellbeing in this cohort, highlighting the importance of school as an environment that fosters children’s wellbeing [23]. As policy currently (and rightly) focuses on education recovery and lost learning, government should also ensure it is considering the need for additional funding to support wellbeing and personal development alongside academic progress. A wellbeing package would allow schools, where required, to hire additional staff to deliver mental health support to pupils and teaching staff, run interventions to address socio-emotional skills gaps, improve links with local services, and deliver training to teachers.

Whilst the pandemic has brought the issue of access to support to the fore, we know that the challenges young people face are not new – and it remains essential to also consider the role of preventative measures in curbing a longer-term crisis of mental health in children and young people. It is important that any additional requirements placed on schools surrounding mental health and wellbeing should be met with funding, training and the support needed to improve outcomes for young people.

The development of broader personal skills is critical in preparing young people for their lives, encompassing not just wellbeing but also confidence, and employability. Interventions are important as a part of the ‘education recovery’ discussions, but should remain an integral feature of a young person’s experiences at school.

The Prince’s Trust Achieve programme supports young people aged 11 to 19 to engage and succeed in education. Achieve provides young people – particularly those at risk of underachieving – with the space and attention they need to: learn skills; develop confidence; raise aspirations and improve their attitude to learning. It aims to engage young people in education and ensure that all are given the opportunity to realise their potential.

As we look toward the future and how we support young people to prepare for their lives outside the school gates, it is important to consider how we inspire them about the opportunities available and raise their aspirations for the future – and high quality careers intervention should play a role here.

These approaches apply equally to FE colleges as well as schools – and there must be adequate funding to ensure that these institutions are able to deliver the highest quality experiences to young people. As a part of this, there is a need for the base funding rate to increase to at least £4,760 per pupil, but with an aim to reach £5,000 in line with recommendations from the Association of Colleges [24].

Education recovery funding for the 16-19 cohort must also consider the rounded development of young people – with the transition point between school and college likely to be particularly challenging for young people through the course of the pandemic. Whether pastoral care, personal skills development or wellbeing interventions, additional support will be needed for many young people during these difficult times. We see The Prince’s Trust Team Programme as one intervention which could help to provide the elements of support that those young people most at risk of becoming NEET, or who have fallen out of the system in recent months, need most. This 12-week programme supports 16-25 year olds – helping to prepare them for their next step through personal and employability skills development, work experience and the execution of a community project.

Summary of Recommended Actions

Throughout this response, we have made a number of recommendations and highlighted areas for further attention in line with the questions posed in this inquiry. These are as follows:

Extend the Kickstart programme for at least 6 months.
Ensure Youth Hubs are properly resourced, that they are easy to access, and that staff are trained to a high quality.
Waive Employer National Insurance Contributions (NICs) for under 25s.
A ‘Kickstart Plus’ job guarantee that creates paid, at least at the minimum wage, employment opportunities for young people who have been unemployed for 12 months or who have been referred by their work coach or local partner.
Ensure interventions are in place to support young people furthest away from the labour market – working with expert organisations to deliver targeted support.
Skills policy must focus on supporting young people to develop the skills to help them succeed in the labour market, including a focus on sectors set to grow in the coming years and building pathways to higher level skills.
Implement changes to apprenticeships policy to increase the number of young people starting apprenticeships – this includes more flexibility in the levy and targeted incentive payments.
Ensure that ‘education recovery’ includes a focus on personal development and wellbeing – making funding available for schools and colleges to support this.
Encourage a long-term focus on supporting young people to succeed outside of school – developing confidence and personal skills alongside raising aspiration through high quality careers guidance.

10th May 2021