Youth unemployment ‘set to more than double by end 2020’
New analysis by the IPPR think tank estimates that an extra 620,000 young people (18-24) will be unemployed by the end of the year. On top of the 410,000 young people already unemployed, this brings the total to over a million.
Warning that this will be the highest number of young people unemployed on record, surpassing the levels seen in the 2008/9 and 1990s recessions, the IPPR calls for £3 billion in government intervention to create jobs and support young people.
It also warns that unemployment at an early age can cause serious 'scarring effects' on people’s life chances including lower wages, increased risk of further unemployment and worse health into later life. These risks would be most severe for the young people who claim benefits lasting for six months or more. IPPR estimates that 380,000 young people will do so in the last three quarters of the year.
It recommends that everyone under the age of 25 is in education, training, apprenticeship or a job. To achieve this, it calls for a range of measures. This includes a £1.5 billion fund to part subsidise the wages of young apprentices in England, support the creation of up to 200,000 new apprenticeships for young people and provide an additional £400 million to the apprenticeship levy budget to fully fund the training component of apprenticeships for small businesses (SMEs).
IPPR also proposes the Right Start Fund, which would create at least 140,000 new jobs for young people who are still claiming benefits after six months. These jobs would last for six months, be fully funded by the state and focused on green jobs such as in construction retrofitting homes and heating systems, or in the care sector. IPPR estimates the cost of the Right Start Fund would be at least £1.1 billion but could be scaled up over time.
“We face an unemployment crisis in the UK,” said Harry Quilter-Pinner, IPPR Senior Research Fellow and lead report author. “Our analysis suggests youth unemployment could more than double by the end of the year. This would be a huge waste of talent and potential. It doesn’t have to be like this. That’s why we are calling on the government to step in to guarantee all young people either a funded place in education, an apprenticeship or a job.”
Jim Clarke, CEO of The Levy Company, has called on Government to lower the Apprenticeship Levy qualification payroll level to £1m PA from the current £3m, and keeping the contribution at 0.5% of the excess, of which employers can spend 75% on apprenticeships and 25% on upskilling their staff with other training. He has also called for an increase of the current 25% of levy pots allowed to transfer, from large employers to SMEs, to 100%.
This, he said, would result in fewer apprenticeships funded by the Government with the savings being used to fund the NHS and infrastructure projects; more apprenticeships being funded by employers but with far more control over its use; and explosive growth in both apprenticeships and 16 to 19 year olds in permanent jobs.
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