Around one million 16-24 year olds in the UK are not in education, employment or training (NEET). That’s one in seven young people, drifting up in recent years and well above the one in ten or less in the best performing countries. It’s a huge loss of potential, with large economic and fiscal costs.

A problem long in the making

This isn’t a sudden development. In 2020, L&W’s Youth Commission pointed out that UK NEET rates were higher than elsewhere and proposed answers. Back then 800,000 young people were NEET.

The causes are well rehearsed, even if there isn’t a single agreed diagnosis. Disruption during and after the pandemic has played a role. The decline of Saturday jobs and working alongside education has reduced experience of work: 58% of NEETs have never had a paid job. Mental ill health is rising and people are more willing to talk about it; education attainment has stalled over the last decade; and youth apprenticeships are down one third since 2017. Many point to the need to act early to prevent NEETs. That’s right, but 5% of 16-17 year olds are NEET, rising to 16% of 22 year olds, so we can’t ignore the post-18 system.

The benefit system has played a role too. Our analysis shows only one in four NEETs are on unemployment-related benefits, where most help is targeted. A further one in four are on incapacity benefits and offered little if any help back into education or work, even if they might be willing and able to try. The remaining half are not on out-of-work benefits. Some are waiting to start a job or course, or taking a gap year, but others risk drifting further from education and work. A system that targets ever more action on one in four of those who might need help, and largely ignores the other three, isn’t fit for purpose.

Some good policies, but too short-term and piecemeal

Governments haven’t stood by. The previous Government’s Kickstart, covering wages for young people out of work for longer, worked during the pandemic, as did its predecessor, the Future Jobs Fund, during the financial crisis. This Government’s changes are so far pieces of the jigsaw rather than the whole picture. The new Youth Guarantee, which we argued for in 2020, is limited to a few trailblazers and short-term funding. The Youth Jobs Grant, a Kickstart for long-term NEETs, is also something we’ve argued for, though eligibility should be wider. A pivot of apprenticeships to young people has started but again is limited so far: largely an extra payment for employers taking on young apprentices and some restrictions on funding for older apprentices at higher levels.

Time to act radically

The Milburn Review is expected to call for much more radical action. Here’s what it should include.

First, set a national goal that fewer than one in ten young people should be NEET, and make a promise: we will guarantee you a job, training place or apprenticeship, and in return you need to engage with the help available. A positive offer, with the goal as a catalyst for action and a benchmark for progress. The remaining actions would help to deliver this.

Second, give Mayors in England responsibility for a plan to ensure every NEET in their area is engaged and well supported, including those not on benefits. The tricky bit is what powers they need, given they won’t control every part of the system (the NHS, for example), and what consequences other services face for not following the Mayor’s lead. And we need a plan for areas without a Mayor.

Third, reboot the skills and apprenticeship system. Longer-term, that means more taught hours for 16-18 year olds, who get 10 hours a week less than young people in Germany. An immediate step would be to fund a level 3 place for every under 25 that colleges take on so they’re not forced to turn young people away: higher education places are uncapped but further education places aren’t. We can also pivot apprenticeships towards young people, for example through a ‘flex and match’ approach that lets employers spend their levy on non-apprenticeships if they invest more in young people.

Fourth, rewire the welfare system so young people must engage with appropriate support. For those on unemployment-related benefits, that should mean creating a Youth Allowance within Universal Credit (as we argued in 2020) which focusses on both finding a job and gaining skills to stay in work, rather than just a job alone. It could include devolving Jobcentre Plus functions for young people to Mayors, with our evaluation of the MyGo centre in Suffolk a potential template. For those on health-related benefits, it could mean a regular Work Support Conversation to hear about help available, with take-up voluntary (as we argued in The Benefit Trap), or agreeing and sticking to a plan appropriate to their circumstances. The key is who judges what’s appropriate: health professionals, Work Coaches, careers advisers, or all of them?

Fifth, make it easier for employers to take on young people through a growth-friendly environment and employment costs, such as National Insurance and regulation, kept as low as possible. This is tricky. Employers need guidance on job design, particularly for those with long-term health conditions, but that’s not enough in a flat economy with rising costs.

It’s now six years since we raised the alarm over NEET levels and set out a plan for doing better, and we’re not alone. We have no more time to waste. It’s time for action.

By Stephen Evans, Chief Executive of Learning and Work Institute