Tackling youth unemployment could generate £69bn for UK economy

  • Youth Employment Group calls for “Young Person’s Guarantee” to reduce the number of young people not in education, employment or training (NEET)
  • 57% of the UK public believe government must do more to get young people into work
  • Over 60 organisations are calling for the government to adopt a Young Person’s Guarantee for England
  • England “lagging behind” other OECD countries with approach to youth unemployment
  • Evidence identifies early intervention and targeted support as essential to success

Youth unemployment risks diminishing the potential of young people and denting their long-term job prospects. But it could also be costing the economy billions in lost GDP.

According to new calculations from the Youth Employment Group (YEG), reducing the number of young people not in education, employment or training (NEET) to the same levels as the Netherlands could generate £69 billion in GDP [1].

More than 790,000 young people are currently NEET, a 23% rise over the last two years [2]. This equates to 12.5% of all British young people across the UK, a figure that rises to 13.8% when looking at England alone. The YEG points to The Netherlands, the country boasting the lowest figure in the OECD (4.4%) [3], as the example to follow.

In a bid to reduce unemployment and protect the life chances of young people, the YEG has today launched the “Young Person’s Guarantee”. If adopted by policymakers in England, young people under the age of 25 will receive support to access employment, training or education within four months of leaving employment or formal education.

Policies to jumpstart the progress necessary to meet the standard of The Young Person’s Guarantee

The Youth Employment Group calls on the government to implement five policies:

  1. Proactively support young people in education who are at high risk of NEET.
  2. Re-commit to Youth Hubs and extend their services to all economically inactive young people.
  3. Establish a new joint ministerial brief between the Department for Work and Pensions and the Department for Education.
  4. Pilot a targeted placement scheme for young people who are long-term NEET.
  5. Strengthen and broaden the range of Level 2 and Level 3 pathways available to young people.

These proposals were today endorsed by 60 organisations devoted to helping young people into work and training. In a joint letter to Prime Minister Rishi Sunak, they called on the government to adopt the Young Person’s Guarantee for England.

Phoebe Arslanagic-Wakefield, Senior Policy Advisor at Impetus and author of the Young Person’s Guarantee says:

“Time spent neither learning nor earning can permanently dent a young person's life chances, and despite the efforts of many years, the proportion of young people who are NEET remains far too high.

“Based on best practice and firmly focused on what works, our recommended interventions can jumpstart the process of changing that story and improving our offer to young people, helping them to find work and get the best start, to all our social and economic benefits."

Popular proposals

The proposals listed in the Young Person’s Guarantee have received a warm response from members of the UK public. According to a poll by YouGov for the Youth Employment Group [4]:

  • 81% of UK adults (81% in England) support the idea that young people should receive support from the government to start work, training or education within four months of becoming unemployed or leaving education.
  • Some 43% of people who voted Conservative at the last General Election believed that the government should do more to help young people into work. The figure rises to 71% among Labour voters and stands at 57% for all voters.
  • The majority (73% in the UK, 74% in England) believe that reducing youth unemployment will benefit the economy and 74% (in the UK and 74% in England) believe that such a result would be beneficial for health and wellbeing.
  • Some 64% of adults in the UK (64% in England) believed that getting more young people into work would make their local community safer.

Tackling youth unemployment: the principles of success

By failing to implement a young person’s guarantee to date, England is falling behind the standards of other developed nations. The Young Person’s Guarantee paper points to best practise both in the UK and around the world points and identifies four evidence-based success factors that must underpin any approach to reducing NEET numbers:

  1. Early intervention raises effectiveness.
  2. One-to-one support is vital.
  3. Public employment services are central.
  4. Place-based and nationally coordinated.

Tony Wilson, Director of the Institute for Employment Studies and Co-Chair of the YEG, said:

“One in eight young people are outside of education or employment, a figure that has barely budged in the last thirty years and if anything has been getting worse in the aftermath of the pandemic. This is a waste of young people’s potential but it’s bad for the economy and for living standards too. We should aim for far better, by guaranteeing that all young people will get the help that they need to get into employment or learning. The good news though is that if we can get this right then the benefits of acting now will far outweigh the costs of doing nothing.”

Naomi Phillips, Deputy Chief Executive at Learning and Work Institute and Co-Chair of the YEG, said:

“Action taken by Government, employers and others protected many young people from the risk of long-term unemployment caused by the pandemic. We are facing a different – but no less urgent – issue now, with hundreds of thousands of young people being left behind and not in work, education or training. The Young Person’s Guarantee sets out practical, workable solutions which would support young people to realise their potential, while at the same time making strong economic sense.”

Barry Fletcher, Chief Executive of the Youth Futures Foundation and Co-Chair of the YEG, said:

“The high number of young people who are not in education, employment and training, is a huge waste of talent and potential, which if addressed, could contribute massively to higher economic growth. To tackle this challenge requires ambition, reform and investment which the Young Person’s Guarantee if implemented would deliver and ensure that we can be a leader in providing better opportunities for young people across the country.”

Laura-Jane Rawlings, CEO of Youth Employment UK and Co-Chair of the YEG, said:

“In this year's Youth Voice Census we heard that young people do not feel that there are good quality opportunities available to them where they live. This is having a real impact on their wellbeing and confidence in their futures. When young people are in good quality work, with good training and support like apprenticeships, they are thriving, so it is imperative that we raise the bar for young people and ensure there are quality education, training and employment opportunities for all.”

Richard Rigby, Head of Policy and Public Affairs, The Prince’s Trust said:

“Prolonged periods out of work or education can have a debilitating and long-term effect on young people’s confidence, wellbeing and aspirations, especially for those facing the most disadvantage.

“The Young Person’s Guarantee provides a pragmatic solution to this issue, founded on evidence and supported by the majority of the public, that will not only benefit broader society, but an entire generation to feel positive about the future and achieve their potential.”

Steve Haines, Director of Public Affairs at Impetus and Co-Chair of the YEG, said:

“All the evidence points to a clear economic, as well as moral case for guaranteeing that all young people can receive support to access employment, training, or education opportunities within four months. This is particularly true of young people from disadvantaged backgrounds who Impetus research has shown are twice as likely as their better-off peers to spend time not in education, employment or training. This Guarantee sets a road map to economic growth and transforming the lives of young people across the country, built on consensus and overwhelmingly supported by the public. With the upcoming General Election, this is an opportunity for the major parties to show they serious about the next generation.”

[1] Lifetime savings calculation by the Youth Employment Group, based on the GDP multiplier calculations in The Youth Employment Index (PwC and The Youth Futures Foundation, p. 95)

[2] Office for National Statistics, Young people not in education, employment or training (NEET): August 2023

[3] OECD, Youth and the Labour Market - Youth Not in employment, Education or Training (NEET), 2019

[4] The figures in this section are from a survey completed by YouGov Plc on behalf of Impetus and the Youth Employment Group. Total sample size was 2,200 adults. Fieldwork was undertaken between 21st - 22nd September 2023. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

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