Despite this morning’s Daily Telegraph front page headline, IPPR is not proposing to 'scrap benefits for under 25s'.
Graeme Cooke is research director at IPPR
Despite this morning’s Daily Telegraph front page headline, IPPR is not proposing to ‘scrap benefits for under 25s’.
Our new report* out today sets out a plan for radically reducing the number of young people who are NEET (not in education, employment or training) without costing the taxpayer anymore. *(//www.ippr.org/publication/55/11516/no-more-neets-a-plan-for-all-young-people-to-be-learning-or-earning)
Consistently, evidence shows that having decent qualifications and practical work experience are what makes a difference to young people’s job prospects.
However, the current systems of benefits and support do not promote or ensure either. Young people on JSA cannot engage in full-time learning, while those on ESA or Income Support can lose connection from education and employment entirely.
Losing touch from either learning or earning is deeply damaging for a young person’s own prospects – and often hugely costly for society. IPPR’s proposals draw on lessons from countries like the Netherlands and Denmark, where they have a distinct work, training and benefits track for young people – separate from the adult welfare system – and very low levels of NEETs.
With this in mind, IPPR recommends a new ‘youth allowance’ should replace existing out of work benefits for 18–24 year olds and provide financial support for young people who need it, conditional on participation in purposeful training or intensive job search. Access to inactive benefits should be closed off for all but a very small minority.
To pay for a substantial expansion of financial support for young people who are currently NEET or in further education, the report says the ‘youth allowance’ should be paid at a standard rate and be means tested on the basis of parental income for those under 22.
This would mirror the approach to the maintenance grant for university students. The parental means would not apply to young people aged over 21 or who have children, have lived away from the family home for at least three years, were in local authority care, or are irrevocably estranged from their parents. Those with parental income above £25,000 would be able to access help to train and work.
IPPR also recommends a new ‘youth guarantee’ should be established that offers young people access to further education or vocational training plus intensive support to find work. For those not learning or earning after six months, paid work experience and traineeships should be provided, with no option to refuse and continue receiving the youth allowance.
We also want large firms to either offer apprenticeships to young people, in proportion to their size, or pay a ‘youth levy’ towards the costs of training young people. Resources raised should be controlled by employers, via Local Enterprise Partnerships, and used to fund vocational training and apprenticeships, potentially focused on supporting smaller firms.
The government should set national objectives and priorities for the youth guarantee, but local areas should organise and deliver it.
Youth unemployment is not decreasing at the same rate as unemployment as a whole, which indicates the current system is fundamentally flawed and in urgent need of radical reform with respect to how it deals with young people.
As we look towards the next election, politicians on all sides need to seriously consider how we can save this lost generation from the damaging effects of long term unemployment.
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