Keir Starmer says the current benefits system is unsustainable, unfair and needs changing to avoid a wasted generation of young people who are not in education, employment or training (Neet).
The government is concerned about the rising number of young people aged 16 to 24 who are Neet, which in the quarter to December 2024 was estimated at 987,000 in the UK. This is 13.4% of all young people in this age group. The increase, from around 11% in the period prior to the start of the pandemic, is linked to long-term illness among the economically inactive.
About 40% of young people who are Neet are unemployed (not in work but looking for work) and the other 60% are inactive (not looking for work). Over the period of the pandemic, the number of young people with a mental health issue who are inactive because of long-term sickness has risen sharply.
This is clearly concerning, but it is not entirely new. The number of 16- to 34-year-olds with a mental health condition, who are economically inactive because of long-term sickness, increased from around 100,000 in 2013 to about 180,000 at the start of the pandemic. The figure is now over 250,000. This long-term trend is part of a wider increase in disability prevalence across the UK’s ageing population.
When discussing young people specifically, social policy experts such as myself use the label Neet, because “inactivity” also includes those in education and just using the youth unemployment rate does not capture the scale of the challenge.
Young people (and particularly lower-attaining young people) tend to become Neet when they make the transition from school to post-16 learning, and then from learning to work. But the lack of robust data on these transitions means we still don’t fully understand it.
When looked at historically, the current economic inactivity rate across age groups is not actually very high. The Neet rate among young people is a longstanding challenge, but it seems most responsive to the economic cycle – falling in good times and rising in bad. For instance, Neet rates for 18- to 24-year-olds last peaked in the period after the 2008 financial crisis.
What will help get young people into work?
The welfare reforms announced recently are aimed at addressing some of these long-term issues, specifically: restrictions to personal independence payment (PiP) eligibility and proposals to prevent under-22s from qualifying for incapacity benefits, the health element within universal credit.
Liz Kendall, the work and pensions secretary, says these and other changes will save over £5 billion a year by the end of the decade. But this isn’t just about saving money. As the government has repeatedly said, it is also about getting young people into work.
But trying to save both money and a generation seems a tall order. Can we do both?
Reducing the level of benefits and limiting eligibility does save money and it will certainly force (rather than “help”) some people into work. But it is not an approach that will tackle the mental and physical health challenges this generation is facing.
In discussion of “what works”, we cannot ignore the need to increase employment opportunities for those who are most at risk of becoming Neet. Ideally, this will come from improved economic growth driven by investment. This boosts productivity, creates new jobs and, importantly, drives up the quality of jobs and wages.
However, UK productivity growth since the financial crisis has been weak, and when worse economic times come, we once again face the same challenge. Many young people, even if they are qualified to degree level, face barriers to progress. For instance, it is not easy to access many of the jobs that pay better wages, as they are in parts of the country where the cost of living is particularly high.
It’s positive to see that the government is also investing in mental health support as part if its reforms, and that it has highlighted a number of evidence-based interventions. On mental health, for example, there is strong evidence that relatively light touch cognitive behavioural therapy and NHS Talking Therapies can improve employment outcomes.
The welfare reform package also contains £1 billion a year for employment support. Kendall suggests that this could be used for programmes such as Work Choice, a voluntary employment programme for people who have a disability that prevents them from working or puts them at risk of losing their job.
There is compelling evidence that those who took part in this programme before the pandemic experienced increased employment rates by between 11 and 12 percentage points. We also know that even short entry-level training for very low-skilled unemployed young people can have significant impacts, increasing employment rates by five percentage points.
The government’s programme for change is evidence-based and they are to be commended in recognising and beginning to tackle long-standing issues of Neet among young people. The announcements on welfare will help, but we still need to tackle the root causes of high Neet rates in the UK.
Youth transitions need to be better managed by all agencies of government, especially for those who have mental health challenges. There also need to be better jobs available for young people who become disillusioned with the education system.
Growing the economy, together with the package of measures announced, will go some way to help. But some support needs to start even earlier. Young people who do not perform well in school have few education or employment options – this is the real tragedy of lost generations.
Peter Urwin has received funding from UK Research Councils, the Nuffield Foundation and government departments such as DWP and DfE to investigate the challenges that young people face in making the transition from education to employment.
This article was originally published on The Conversation. Read the original article.
