The Youth Guarantee: A Welcome Step, But Will It Be Enough?

March has been an important month for young people. The Youth Guarantee, which is a manifesto commitment of the government, was extended and expanded in response to the growing crisis of “NEETs”. At The Social Mobility Commission, we believe NEETs have long been forgotten by politicians, policy-makers and social mobility champions. This renewed focus is to be welcomed. But will it make a difference and is it enough?  

A Welcome Step, But Not a Game Changer

Until last week, policy focused on reviews, local pilots and a Jobs Guarantee for 18-21 year-olds furthest from the labour market. The numbers eligible were small.  The new package extends eligibility substantially.  The Jobs Guarantee now includes 18-24 year-olds, there is a new £3000 Youth Jobs Grant for employers, additional apprenticeship incentives for SMEs and reforms which refocus apprenticeship funding on young people.  An additional £1 billion has been invested, over and above the government’s manifesto commitments – supporting, according to the Institute of Fiscal Studies, around 50,000 jobs a year for three years. 

However, compared to the scale of the problem, this is not going to do much heavy lifting.  The IFS estimates that even under optimal conditions, this package will only reduce NEETs to 11.9%.  It is currently at 12.8%, so it’s not a game changer. 

Furthermore, the optimal narrative is unlikely to happen.  Employers will be weighing up whether the new incentives counteract the wider economic uncertainty, the increase in National Insurance and the changes to youth minimum wage. Even if they do, the question will be whether job outcomes will be sustained or short term.  And they are unlikely to impact greatly on young people facing multiple obstacles– especially with low qualifications, mental health diagnoses, and lack of engagement with work.  This group needs more coherent and coordinated support.  

A Problem Nobody Owns

There can be no doubting the difficulty of this challenge. Government is under pressure to act before a full and comprehensive analysis of the NEET problem is ready. NEET numbers have been high for almost a decade, without much policy analysis. And the upturn in numbers since 2021, which has triggered the renewed interest in NEETs, has new and troubling aspects. The gender balance is different, labour market inactivity has risen enormously, health and mental health in particular loom large, welfare reform may be involved, and the labour market context has changed. There is also a problem of “hidden NEETs”.   

While we have a wealth of qualitative statistics about NEETs, there is still a great deal we don’t know. This includes the geography, which Social Mobility Commission data suggests is important.  But we also know little about the different needs and issues within a very heterogenous group.  And little is known about the qualitative experience of becoming and being NEET.   

There is also a very important issue that is hindering progress.  No public agency “owns” NEETs, and there appears to be no consensus as to who should be the lead. 16–18-year-olds are monitored by their local authority, but 19-24-year-olds are managed by the Department for Work and Pensions. If a young person is designated as ‘inactive’ in the labour market, they drop into a limbo – in the system, but with little or no contact. And if a young person does not claim Universal Credit, they are outside of the system altogether.  

In terms of solving this, there seems to be an understanding that initiatives should be youth friendly and joined up. But there remains a question over who is best place to caseload, build relationships and coordinate support.  DWP, Youth Employment Hubs, Youth groups, and colleges all have roles to play.  But can Whitehall really knit this all together – or is it better trusting local partnerships with this critical role? 

The Milburn Review, to which the Social Mobility Commission has already submitted evidence, is promising to get to grips with this and does appear to be genuinely willing to deal with the tricky issues. But it will not report until the summer – with an interim report in July and a final report due in September. It understandable that Government has brought in new measures ahead of developing and introducing a more robust strategy.  

Without Growth, It’s a Zero-Sum Game

However, there is also a potential problem with the ongoing tendency to target the most sticky cases. It is not as if young people as a whole are doing well. If I was a young person studying in college right now, and I was contemplating entry into a labour market which appears very tight and rapidly changing, I might ask whether any of this is going to help or hinder me. Although some of the measures introduced apply to all young people, I can see those who haven’t been in the system leapfrogging ahead of me, because there are additional incentives to support them. I would be particularly bothered if I was studying in any of the sectors which the Government has prioritised for NEETs, such as hospitality or construction. 

Trying to share opportunity around when the “opportunity pie” is limited, often ends up as a zero-sum game. One person’s gain is another one’s loss. Equality only really works well when the overall economy is growing, so that there is more to go around. Fundamentally, whatever we do around the NEET crisis, will only be successful if we can unpick the problems of low growth, poor productivity, and the regional disparities which damage our country. These are all themes which the Social Mobility Commission has repeatedly emphasised over the past years, and is why we have championed the idea that we need a new strategy for social mobility which puts innovation, place-based approaches, and locally driven growth and reform, at the centre of policy.  

By Alun Francis OBE, the Chair of the Social Mobility Commission and Principal and Chief Executive of Blackpool and The Fylde College