1. Youth Unemployment: the current challenges Presentation by Pat Russell – Young People and Employment Division, DWP And Kate McGimpsey –DfE/BIS Apprenticeships Unit

2. Youth unemployment: the data

3. Breakdown of the population aged under 25 Most 16-17s are inactive students, while most 18-24s are economically active non-students. Around 1.2 million 16-17s (82% of the age group) and 1.85 million 18-24s (32%) are in full-time education (FTE). Most under-25s in FTE are economically inactive but over 850,000 are working around their studies and 277,000 are ILO unemployed. There is a much larger absolute number of 18-24s not working or in FTE. But 70% of 18-24s outside FTE are working, compared to only 33% of under 18s not in FTE.

4. The overall proportion of under 18s not working or in FTE is lower because participation in education is much higher. This is also true for NEET figures that take account of those in part-time study. But the labour market performance of under 18s not in FTE has deteriorated sharply in the last decade, while that of 18-24s held up better, at least until the recession. % of age group not working or in FTE Employment rate if not in FTE (%) 16-17 year olds 18-24 year olds Employment rates among young people

5. Youth unemployment remains below the peaks following past recessions… Excluding students, there are currently 618,000 under-25s unemployed on the ILO definition. This compares to peaks of around 825,000 in 1993 and nearly 1.1 million in 1985 On the claimant count definition there are 430,000 18-24s on Jobseeker’s Allowance. There were 800,000 in 1993 and over a million in 1985. Source: ONS. Claimant count figures focus on 18-24 year olds as under-18s do not have routine access to JSA

6. Key facts The youth population is diverse and most are in work or studying. The trends are different for 16-17s and 18-24s. The proportion of 16-17s not in education or work worsened up to 2005 but has since improved. For 18-24s the proportion not in education or employment was falling until 2001 and then levelled out, but some of this improvement has been lost in the recession. Overall trends are determined by changes in the numbers staying in education and the numbers not in education finding and staying in work. Participation in education has trended up since the 1980s, with 80% of 16- 17 year olds in FTE and over 90% in some education or training; equivalent figures for 18-24s are 30% and over 40% respectively. The employment rate of 16-17s not in education has fallen over the last decade, while that for 18-24 year olds has fallen in the recession. Young people move more often between jobs and into and out of education. As these transitions are not always seamless, youth unemployment tends to be higher than for over-25s. However, most spells of unemployment are short and youth unemployment remains below the peaks following past recessions. Spells in inactivity – especially if on inactive benefits – tend to be longer. Most young people who make a new claim for JSA leave quickly – 60% within three months and 80% within six months. Exit rates have improved over the last year but remain below pre-recession levels.

7. What we know about the characteristics of young people who are NEET Most young people do not spend any time NEET and have positive expectations for the future. A minority of young people are at risk of becoming long-term NEET, particularly those from workless backgrounds, those excluded from school and those who do not do well at GCSE. Nearly half of those who get no qualifications at GCSE spend a year or more not in work or education by the time they are 18. There is a strong link between a young persons background and likelihood of becoming NEET. The NEET rate at age 17 for those from non-professional parents is about four times higher than for those with professional parents. Care leavers are particularly at risk of being NEET – around 30% of 19 year olds who were formally in care are NEET. Children in care have poorer educational outcomes, however the proportion NEET does not vary greatly for those without or with qualifications. Young people from workless backgrounds and areas struggle to find work and have low expectations for the future. However, a common theme expressed by young people is the desire to work rather than spend their lives on benefits. Less disadvantaged groups like recent graduates, despite recent high unemployment, can still expect to do much better in the future.

8. NEET Segmentation - DfE research on 16-18 year olds Open to learning NEET – 41% of the NEET group, distinguished within the NEET group by their attainment at Level 2, their more positive experience of school, their increased likelihood of returning to education or training in the short-term and their overall optimism for the future. Sustained NEET – 38% of the NEET group, tend to have had negative experiences at school, to have truanted or been excluded, and to have left school with few or no qualifications. They are most likely to have parents who are not employed and to have a disability or health problem. Undecided and NEET – 22% of the NEET group, have generally attained Level 1 and do not face any significant personal barriers preventing them from participating in learning. However, they stand out for being dissatisfied with the opportunities available to them and do not believe that they have access to the jobs or courses they are interested in. They are also as likely as the sustained group to remain NEET, at least in the short-term, and appear to lack the skills and support to plan for their future

9. Welfare Reform

10. Our policy direction Transformational reforms of benefit system and the introduction of Universal Credit, to make work pay. People on out-of-work benefits expected to take opportunities offered. Getting Britain working requires the support of all our partners. Jobcentre Plus, service providers, local authorities and employers of all sizes need to come together in their communities and find new and innovative ways to support people back to work. We are modernising the way Jobcentre Plus delivers its services. More responsibility for Jobcentre Plus advisers to assess customers’ individual needs and offer the support they see fit including access to a number of Get Britain Working measures Through the Work Programme, giving more freedom to providers, leaving them to make judgements about how best to support jobseekers who need extra help and doing away with the prescriptive employment programmes of the last Government. Results focus: Jobcentre Plus staff will be more results-focussed; providers will be paid by results and incentivised to focus on hardest to help Environment that encourages sustained economic growth and support structural economic reform to create sustainable jobs

11. Delivering Employment Support

12. Jobcentre Plus offer for JSA customers The Challenge JCP responsible for administering out of work benefits system Previously done using highly standardised operating model One size fits all is ineffective and inefficient The New Proposal JCP managers and advisers given as much flexibility as possible Trusting frontline advisers to use skills to give customers the help they need Flexibility supported by new JCP performance framework JCP will be judged by its results not by its activity The new support model will consist of –Face to face meetings –Flexible adviser support and a menu of customer provision

13. Peer to Peer Volunteer Advisors Mentors Work Clubs On Line Networking Work Experience Internships Work Pairings Mandatory Work Activity Apprenticeships Volunteering Work Together, inc National Database of Opportunities JCP Engagement with local voluntary Sector Enterprise New Enterprise Allowance (including mentoring and financial support) Enterprise clubs Self-employment guidance Jobsearch Advisor Support Jobsearch training Job vacancies database On line support Careers Advice JCP Group Sessions Skills Basic Skills Support Occupational Training, including sector-based training and Service Academies Other training provision available through the skills system Advisers will have flexibility to respond to the needs of individual customers: There will be a fully diagnostic interview with a customer at NJI / first WFI to determine the level and type of support the customer receives Advisers will agree a personalised ‘contract’ with the customer Advisers will be able to give each customer the support they think they need, using the ‘time bank’ approach to adviser interventions They will be able to refer customers to support based on their individual needs and barriers Different support will become available at different points of a claim for JSA customers There will be some flexibility to defer referral to the Work Programme based on activity undertaken via Jobcentre Plus The flexible menu will be underpinned by the refreshed Jobcentre Plus Performance Framework District Managers will have flexibility to respond to the needs of the local labour market: The menu of support below will in principle be for all Jobcentre Plus customers, though some may be restricted through national policy District Managers will have some choice over which elements to offer Subject to ongoing policy discussions, they will choose how and where to target the Flexible Support Fund Some types of support will be targeted at certain disadvantaged areas, and not all support will be available in all areas Flexible Support Fund Discretionary funds to help customers overcome specific challenges to employment or to support partnership work to tackle disadvantage N.B. Policy still under discussion ESF Funding to support specific disadvantaged customers through locally prioritised contracted provision Funded separately from other support Flexible menu of support

14. Get Britain working measures To Get Britain Working we also need to harness a wide range of talent, ideas and good practice – from business, the public and from the charitable and voluntary sector and local deliverers of services. With this help we are enhancing the support that remains at the heart of our commitment to help newer customers into work. This includes the development of a number of new measures: Work Clubs to encourage people who are out of work to exchange skills and share experiences, Work Together to develop work skills through volunteering, The New Enterprise Allowance and Enterprise Clubs to support unemployed people who wish to move off benefits into self-employment. Work Experience to help young people gain greater insight into work;

15. The Work Programme A single programme that allows providers to design support based on the needs of individuals Increased flexibility so that providers are able to concentrate their resources on helping people into work Payment largely through job outcome payments rather than process payments, and rewarding providers for keeping people in work for longer than ever before Providers will be given longer to work with customers (at least 2 years) so that there is a real incentive to invest in customer support Minimising the amount of money we pay providers for outcomes that would have happened anyway without their support Ensuring that providers are incentivised to help all customers by paying more for customers further away from the labour market

16. In addition, DWP will…. launch a £30m Innovation Fund to develop innovative solutions to help disadvantaged people, focussing on young people who are NEET or at risk of becoming NEET enable early access to the Work Programme for 18 year old NEETs who had been on JSA when 16/17 because of hardship provide job search support for 16 and 17 year olds on JSA by making available access to JCP advisor support introduce from August this year a sector ‑ based work academy route for helping people into work

17. Apprenticeships

18. Apprenticeships: context and priorities Jobs, with training to industry standards - 85,000 employers; 130,000 locations; 200 job roles. Demand-led, by employers - not target-driven. Government invests but employers create Apprenticeships. Skills development programme, not unemployment measure – though sometimes synergy between the two. Priorities: expanding numbers (though not at expense of quality); raising profile and building brand; increasing Advanced Level and Higher Apprenticeships; streamlining systems to attract more employers. 2011-12 budget over £1.4bn – funding for over 360,000 apprentices. Additional £180m in Budget 2011 allows for further 50,000 19+ apprentices - overall, Government will fund at least 250,000 more adult Apprenticeships over next four years compared to previous Government’s plans.

19. Making Apprenticeships work for young unemployed people Additional Budget 2011 allocations include 40,000 places intended for 19- 24 year-olds who are NEET Catalyst for closer working between Jobcentre Plus and National Apprenticeship Service Developing opportunities for progression into Apprenticeships, by direct referrals or as next step from employment support measures - Work Trials; Work Experience Other routes in – Access to Apprenticeships pathway in the programme; locally-designed “pre-Apprenticeship training”; range of DfE/BIS/DWP measures can help develop skills needed > Participation Strategy due in Autumn 2011.