16 November 2011

Introduction

This week’s unemployment figures have brought further depressing news about the prospects for young people. Last week, exactly seven days before the latest figures were released, MPs held an Adjournment debate on youth unemployment. It was an interesting debate that set the policy dynamics in context. Opposition members, who had called the debate, urged the Government to adopt their Party’s 5 point plan for jobs while the Government in response highlighted some of the main measures it was taking

The context

Forecasts at the start of the year suggested that unemployment in the UK would rise slightly this autumn before starting to fall in 2012. That is still the hope but as the CIPD suggested in its Labour Market Outlook published last week, it may be a slow, ‘painful’ process. Currently unemployment for 16-24 year olds is running at twice the rate that for those aged 25+ and in some regions the figures are worse. Entry to the labour market for young people remains an important policy issue as this debate highlighted

What is the Opposition proposing?

Labour has a five-point plan, details of which were spelt out by Ed Balls in his Conference speech in September. Collectively the plan is intended to stimulate the economy and help grow jobs, and includes: repeating the bank bonus tax and using some of the money to guarantee jobs for 100,000 young people; bringing forward long-term investment projects for schools, roads etc; reversing January’s VAT rise for a temporary period to help boost spending; introducing a one year 5% cut in VAT on home improvements to help the housing market; offering a one year NI ‘holiday’ for firms taking on new recruits

What is the Government doing?

The Government has been working on a number of fronts but as the Employment Minister highlighted, three approaches in particular are being adopted to help young people, namely: helping them gain some experience of work through placements and Work Academies; increasing the number of apprenticeship places; and developing the Work Programme. Thus in April, more money was provided through the Budget for apprenticeships, work experience, UTCs and STEM promotion. This was followed up in May by the release of ‘Supporting Youth Employment’ Paper and the Response to the Wolf Review and in the summer by the launch of the Work Programme and sector-based Work Academies

And finally

The latest unemployment figures have been accompanied by a further burst of activity which for young people includes incentive payments to encourage small businesses to take on apprentices aged 16-24; this is intended to support 20,000 new apprenticeships over the coming year. Also, additional funding is being made through the FE sector to help the most ‘disengaged,’ while new community work schemes and business mentors for entrepreneurs have also been announced

© Steve Besley, Head of Policy, The Pearson Centre for Policy and Learning 2011.