Government Policy (NEETs)

Tuesday 9th November 2010 Westminster Hall

13:30

[Tony Baldry (Banbury) (Con)]

A number of right hon. and hon. Friends want to intervene during this debate. As I have told the Minister what I intend to say, I hope hon. Members will excuse me if I take my speech at a bit of a canter because that will, I hope, give colleagues the opportunity to intervene when they can. Given the interest in this topic, I slightly regret that I did not enter the ballot to have an hour and a half debate.

A report on young people not in education, employment or training produced earlier this year by the then Select Committee on Children, Schools and Families states:

“We accept that the term ‘NEET’ is imperfect. In particular, its use as a noun to refer to a young person can be pejorative and stigmatising. It is, however, a commonly used statistical category, and—in the absence of an appropriate alternative—we have accepted it as a first step in understanding the issues.”

A NEET is someone under 25 who is in employment for less than 16 hours a week and who is not in education or training. My constituency has two main towns, Banbury and Bicester. In September this year, 7.5% of Banbury’s 16 to 18-year-olds—approximately one in 12 young people—were not constructively engaged in education, employment or training. Nationally, the Prince’s Trust estimates that almost 15% of 16 to 24-year-olds in England are NEETs, which is around 874,000 young people. The Prince’s Trust estimates that the cost to the state of young people who are NEET is £3.65 billion per year.

As hon. Members may know, in recent years, I have helped to establish job clubs in Banbury and Bicester and, earlier this year, we set up a working party involving those running the job clubs—including Jobcentre Plus and Connexions—to consider what more could be done to help NEETs back into education, employment or training. We also considered how to improve the NEET situation in future years and assist the 142 or so existing NEETs in and around Banbury.

I know my hon. Friend the Minister takes the issue seriously. He inherited a skills system that he has rightly described as over-complicated, over-bureaucratic, incredibly micromanaged and top heavy. He has observed that the previous Government went wrong by basing their skills policy on target-driven bureaucracy, failing to provide sufficient attention to community-based adult learning and effectively abandoning a generation of NEETs. However, during the work I have been doing this year, I have become concerned that a number of policy changes might have the unintended consequence of worsening the opportunities for less skilled and disadvantaged young people to move into further education or employment with training.

We need to consider whether returning the contractual relationship to the Young People’s Learning Agency from councils has reduced local flexibility to provide what is needed post-16, and whether removing the ring fence from Connexions funding has put at risk the work needed to prevent NEETs. It is not possible for me to show in Hansard a diagram of what we are doing locally to try to prevent NEETs and to help existing NEETs. However, the simple fact is that Connexions is the gateway for existing NEETs and provides the signposting, engagement and intervention to help them. That is done through support with apprenticeships, engagement with things such as SKIDZ motor mechanics, work trials, personal advice, interventions, or through programmes such as the new projects in Banbury, including the very welcome new Prince’s Trust programme. We need to ensure that Connexions can effectively undertake that work, because we should be in no doubt that the long-term cost to society of a youngster dropping out at 16, 17 or 18 is far greater than the money that would be spent in ensuring they have educational or training opportunities.

[Anne Marie Morris (Newton Abbot) (Con)]

I am certainly grateful for the debate. The comments my hon. Friend makes about the costs are absolutely on point. I am sure he is well aware that the cost to the taxpayer is £97,000 per individual over their lifetime—some estimates put the figure at £300,000 if benefits are included. Does he therefore agree that such figures need to be borne in mind when the Government consider how to resolve this intractable problem?

[Tony Baldry]

I entirely agree with that point, which my hon. Friend makes extremely well.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my fellow Oxfordshire MP on securing this important debate and on the initiatives he is pursuing in our area—I would certainly be pleased to support such projects. Does he agree that what these young people most need is continuing support in the form of advice, mentoring and the monitoring of progress? They need ongoing engagement with work-focused practical experience that can lead to a job, and some modest incentives to reward their progress.

[Tony Baldry]

I entirely agree with everything the right hon. Gentleman has said; he puts the matter in a nutshell very well. Do the current targets for retention rates on courses for further education colleges mean that they may be tempted to turn away applicants with poor school attendance records? That would effectively write off the already disadvantaged, and potentially create a group of long-term disengaged and unemployed young people with little possibility of improving their position. My impression is that, locally, people are working very hard to try to engage NEETs and get them back into education or training. However, that is not easy. By definition, NEETs have mostly decided to opt out or they have other difficulties—although it is important to recognise that young people who are NEET are not a homogenous group with the same issues, and that they are not even necessarily at the same stage of disengagement.

We also need to recognise that some groups of youngsters clearly have particular challenges. Mencap has sent me a copy of the detailed submission that it made last December to the Children, Schools and Families Committee. In that document, it makes the point that three in every 10 disabled young people aged 19 are NEET, and that a youth cohort study found that young people who recorded themselves as having a health problem or disability are twice as likely to be NEET as others.

When a young person is without or not in education, employment or training they require—as the right hon. Member for Oxford East (Mr Smith) said—support in many different ways. Of course, ultimately that support may have little impact if an appropriate offer of employment or training is not available. I am concerned that the present system to provide further education perhaps does not provide a favourable environment for this group of young people. There seems to be a fundamental policy problem. If I understand matters correctly, that problem is money. Each youngster who stays on in school or goes to an FE college takes with them a pot of money by staying on at school or college to do A-levels or other training—their place gets funded. A NEET has effectively opted out of the system and receives no funding. Any organisation set up by the local authority or by anyone else to help NEETs get back into education or training also does not receive any funding. Those with the greatest need receive no funding and those trying to help them are left scrabbling around to find funding elsewhere. It might be worth considering some sort of system of NEET vouchers, so that if a youngster who is a NEET undertakes approved activity or enrols in an appropriate course, that activity or course receives some funding. Otherwise, it is difficult to see how we will break out of this NEET Catch-22.

It goes without saying that we need a name for programmes supporting NEETs that is sympathetic and has an overall project title—“Dealing with NEETs” clearly does not do it. We need a name such as “Youth Engagement,” and the subject needs a brand. There will be those who say that one of the reasons why there are NEETs is that such people feel that they will not find a job. However, there is something of a chicken-and-egg issue here. The Prince’s Trust has observed that the first concern for disadvantaged young people is often their need for money and a job, and the skills they want are those they need to give them a practical route to employment.

The Chartered Institute of Personnel and Development has observed that, despite financial difficulties and a reduction in vacancies, the majority of organisations remain enthusiastic about recruiting new talent. However, many organisations that require specific skills find that those are not being met by job candidates. The CIPD’s recruitment, retention and turnover survey of this year found that two thirds of organisations report that a lack of necessary skills is a barrier to recruitment. It also found that a lack of necessary specialist skills was a greater problem for the manufacturing and production professions—76% of that group—than any other. If young people do not acquire skills, the reality is that they are unlikely to be able to access jobs.

[Julian Smith (Skipton and Ripon) (Con)]

Does my hon. Friend agree with me that the Government’s recent decision to add 50,000 apprenticeship places this year, and hopefully more next year, is a step forward regarding some of the issues he is talking about? Moreover, the Government are committed to moving away from programme apprenticeships, in which most of a young person’s time is spent in the classroom, towards work-based apprenticeships, which are based around the workplace.

[Tony Baldry]

I think that the increase in apprenticeships is fantastic. The difficulty is that NEETs often need to improve their maths and English before they can access apprenticeships. There is sometimes a gap between where they are and where they need to be.

[Ian Swales (Redcar) (LD)]

Although the increase in apprenticeships is extremely welcome, in many areas, including my constituency, one of the problems is finding enough employers who will commit to them. Does the hon. Gentleman agree that further education colleges should be given more licence to start apprenticeship programmes, with a view to finding employers perhaps after one or two years?

[Tony Baldry]

Employers are crucial to apprenticeships, and we all have a duty to encourage employers in our constituencies to take on apprenticeships. Those who engage with apprenticeships realise that it is actually a really rewarding thing to do. That has been demonstrated by a number of employers in my constituency who have taken on apprenticeships as a consequence of their involvement with the Banbury and Bicester job clubs.

As it happens, a number of substantial construction projects are about to start in north Oxfordshire, and I suspect that it would be daft for the developers to rush to recruit people from eastern Europe when they start to run into skills shortages. It must be sensible to liaise with those doing the construction and development work locally, so that they consider the extent to which they would be prepared to work collaboratively with the local FE college, Oxford and Cherwell Valley college, the Construction Industry Training Board and others. By encouraging young people training in the construction industry, they can start to grow locally some of the skills they will need.

I also understand that the bizarre situation exists whereby youngsters, once they have completed their construction skills training, are required to buy a certificate demonstrating they have the necessary competences, which costs about £200, but if they are under 18 Jobcentre Plus cannot fund that. It is slightly bizarre that young people who have acquired skills are unable to demonstrate that because they cannot afford the necessary certificate.

I am glad to say that in Banbury, with the support of Cherwell district council and the national affordable housing programme, we are staring a self-build scheme at Miller road for young people who are NEET. The scheme is unique in providing a blend of education and learning opportunities, to level 1 diploma standard, in construction for approximately 20 NEET young people so that they can improve their employment prospects and life skills development. When the houses are built, the young people will be re-housed in the completed scheme. It is hoped that that pilot project will demonstrate a model that can be replicated on other affordable housing developments. There are several partners in the scheme, including Cherwell district council, Sanctuary housing association, Southwark Habitat for Humanity, Oxford and Cherwell Valley college, Connexions and the children, young people and families services at Oxfordshire county council. The college has designed a bespoke course to meet the requirements of the scheme and is in the process of recruiting young people to the course. The intention is that work will start this month.

In short, that new affordable housing scheme will provide 10 rented units for young people, who will all participate in the building process and receive training from the FE college, leading to a level 1 diploma in construction, and 20 young people, NEETs, will be involved in the building process. I am sure we would have no difficulty in filling more such construction apprenticeships, and there are other successful initiatives, such as SKIDZ, which encourages youngsters to learn motor mechanic skills that are now extremely difficult to fund.

There is clearly a need to keep NEETs engaged. They are often youngsters who, for all sorts of reasons, did not enjoy school or who do not want to try something new simply for fear of failing. As I understand it, Jobcentre Plus and Connexions run a red, amber and green coding system for NEETs: green is for those who are engaged and want to move forward, and red is for those who have simply dropped out. The predominant colour in my patch appears to be amber, verging on red, which suggests that for those who stay engaged there ought to be some incentive, such as the possibility of outward-bound adventure training, or even free swimming. They are young people, and research shows that if a youngster drops out as a NEET, over their lifetime in various ways they are each likely to cost the state and state agencies £1 million.

[Jason McCartney (Colne Valley) (Con)]

I thank my hon. Friend for giving way—putting an amber light on his pacy speech—and congratulate him on securing the debate. Last week, I was honoured to be invited to present the school awards for Moor End technology college at Huddersfield town hall. The school has faced many challenges in recent years. For example, 27 different languages are spoken among its pupils. What really stood out was that the head teacher, Jane Acklam, who provides inspirational leadership, was proud to tell me that only one of the 150 pupils who left the school last year is currently a NEET. Does my hon. Friend think there would be any value in keeping such statistics coming, so that schools can retain some interest in what happens to the children after they leave at 16? That would bring an added motivation and could then link in with the colleges and the wonderful schemes he has mentioned.

[Tony Baldry]

The right hon. Member for Oxford East made the point that young people need support, and hopefully they will receive that from their schools during their school careers, but youngsters become NEETs for all sorts of different reasons. Time has prevented me from giving details—I have given them to the Minister—of young people in my constituency who are NEET for all sorts of reasons. They can be young mums, or they might have become offenders when they were younger. The reasons are not necessarily the result of the school’s failure, but the fact is that a combination of different factors has caused them to disengage.

[Rosie Cooper (West Lancashire) (Lab)]

Skelmersdale and Ormskirk college in my constituency is seen as an example of best practice. It offers very flexible programmes for NEETs, starting with early interventions for 14 to 16-year-olds. The point I really want to make is that the college might very well be penalised for its investment in its NEETs programme by disinvestment in the county council and by the Government’s employment and support allowance regulations.

[Tony Baldry]

The point I made earlier, which I hope the hon. Lady heard, was that we must between us work out how NEETs who have dropped out get funded back into the system. There is a double whammy, because they have dropped out and are not getting money, so the organisations that are helping them have to find money from somewhere else, which is often difficult. That is the challenge for us all.

In north Oxfordshire, we are grateful that programmes such as that run by the Prince’s Trust are now getting involved locally. That programme will take 12 16 to 24-year-old NEETs through an intensive 12-week course, but funding has to be found locally to support the initiative. That is additional funding that we have to find from somewhere. If that is the situation in a constituency such as mine, and if we are looking at anything like one in 12 youngsters becoming NEETs, nationally that is a truly serious issue. We have to find a better and, I suggest, more positive description for that group of young people. We have to recognise that, by definition, they will be youngsters who will need encouragement and support. They will not necessarily always want to undertake mainstream activities. Indeed, they might find accessing colleges and courses difficult.

[Rehman Chishti (Gillingham and Rainham) (Con)]

I congratulate my hon. Friend on securing the debate. Does he agree with me that there needs to be more emphasis on schools equipping youngsters for work, beyond the one or two-week work experience placements?

[Tony Baldry]

Yes, and the more one can engage youngsters in school, the better. Indeed, many of the schools in Banbury already involve youngsters not only in work experience, but, where appropriate, in programmes such as SKIDZ, because they want to keep them engaged.

There are clearly a number of pieces of the jigsaw that we have to get right. They include Connexions and its ability to support youngsters, and apprenticeships, as has been said. My understanding is that the Government want one in five school leavers to become apprentices by 2020, so we need to do more to encourage employers to provide opportunities, particularly in those areas where youngsters particularly want to work, such as construction. The Select Committee made the following observation in its report earlier this year:

“We recognise that future solutions to reduce the proportion of young people not in education, employment or training will have to be more cost-effective and will require efficient joined-up working at local level.”

In Cherwell and Oxfordshire, we are doing everything possible to ensure that there is joined-up working at local level. We all recognise the financial challenges that every sector faces, but clearly it is doubly hard to help young people if they are NEET and therefore receive no funding. With the Banbury and Bicester job clubs, we have made it clear that we want to do everything we can to support people in our community while they are out of work, and help them back into the world of work as speedily as possible. The desire to give that support applies just as equally to youngsters who are NEET.

However, there are some policy issues that need to be resolved if we are to make the progress that we should like. I appreciate that my hon. Friend the Minister inherited some skills and training structures that he clearly believes are flawed, and we are fortunate that his present ministerial post is the one he shadowed extremely ably for a number of years. Many Members are keen to know about the Government’s overall approach in trying to ensure that a far smaller percentage of youngsters between 16 and 24 are not in education, employment or training.

13:50

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

As ever, it is a pleasure to serve under your chairmanship, Mr Chope. It is a particular delight to respond to this debate, secured by my hon. Friend the Member for Banbury (Tony Baldry), who I know cares deeply about such matters. I make it clear that I share his doubts about the label “NEETs”. For some reason, young people seem perpetually prone to being pigeonholed in unhelpful ways—from mods and rockers to hoodies. Of course such terms do not reflect reality and therefore do not do people justice. There is no such thing as a typical NEET; there are different groups of young people with particular kinds of challenges, different circumstances and different needs. As my hon. Friend said, it follows that we will be more effective in dealing with the problems and challenges they face if we have the flexibility to draw on a range of different options and build on best practice.

I intend, in the course of the all too short time that I have, to make nine points of substance and then move to an exciting peroration. My hon. Friend will forgive me if I rattle through those points, but I hope they are relevant to him. Along the way, I will attempt to answer some of the particular issues that he raised. Next week—I know that you, Mr Chope, and the whole Chamber, are waiting with bated breath—we will publish our skills strategy, which will set out the direction we intend to take regarding the funding and management of skills. It will be radically different from the assumptions that have underpinned policy over recent years, and will challenge much of the orthodoxy upon which that policy was based.

Let me deal with one point at the very beginning. I have asked officials to look at the issue regarding certification, which my hon. Friend raised. I agree that it does not seem appropriate—it is anomalous to say the least. We will look at that closely and deal with it.

The young people whom my hon. Friend mentioned, and those whom I meet, have ambition. They want to get on with their lives, and they recognise that learning can help them make something of themselves and can make them objects of admiration and respect. By attaining skills through learning, people gain a sense of value and are recognised by others as having worth. We believe that and care about it, and we will adopt policies that will enable young people to gain that sense of value. The investment we make in young people is our gift to future generations.

I do not doubt that the previous Government cared about such matters too—no party in this place has a monopoly on wisdom, and certainly not on compassion. The matter is one that understandably generates strong sentiment, and sentiment is not something we should disregard in politics; we are not dull utilitarians, are we? None the less, there were real problems with past policy. Many millions have been spent on a bewildering succession of schemes, but to what effect? At the last count, some 874,000 young people between the ages of 16 and 24 —or about one in seven—were not in any form of education, training or work. For a nation that cares about fairness and opportunity and about its own future, that is simply unacceptable.

Let me move to my nine points. The first is that we will certainly take a close look at job clubs such as those in Banbury and Bicester. They are good examples of what can be achieved by local people using prudent public investment, drawing together industry, local government, community groups and charitable organisations. I have discussed the matter with my hon. Friend, and I know they are examples that can be followed. I have asked my officials to look at them to see what can be done to share that good practice.

The second point is again implicit in my hon. Friend’s analysis. We need a more holistic approach to the way we deal with the problem of such young people. It ranges from the circumstances at school and their prior attainment, to family circumstances and the particular physical or mental health issues they may face, to simple matters of confidence born of inadequate skills—a lack of confidence that is inevitable for those who have poor literacy and numeracy skills. However, it is not as simple as that—indeed, it is not simple at all—which is why we need the joined-up approach that I think has been lacking in the past.

Thirdly, we also need to link the issue closely to our benefit reforms. I am speaking to the Department for Work and Pensions about those matters, and I assure my hon. Friend that part of the discussion is about funding. He made a good point about such people carrying funding with them and therefore being attractive to learning providers. We are on the case, and we will look once again next week—I do not want to give away any secrets—at the principles of learning accounts and the part they can play in driving the system through learner choice and employer need. I am mindful of those who are moving from disengagement to engagement in those terms.

[Anne Marie Morris]

There is certainly an attraction to that approach. South Devon college, in my constituency, goes out on to the streets to where the NEETs are to find them. It is a win-win situation. I think we need to go out to get them rather than waiting for them to come to us, which is the point the Minister is making.

[Mr Hayes]

My failure to respond to that point has nothing to do with its salience but with the time I have available. I will certainly take the matter up with my hon. Friend; it is a well-made argument.

The fourth point is about careers guidance. We need, as my hon. Friend the Member for Banbury said, to give such people the right advice and guidance. We will be launching an all-age careers service, which I spoke about last week in Belfast. Those who are interested may have a copy of my speech; those who are very interested can have a signed copy.

The fifth point is that raised by the right hon. Member for Oxford East (Mr Smith) about pre-apprenticeship training. As others have said, it is about getting people to the point where they can enjoy more formal training by the skills they acquire early on. We need a continuum of training, and I am working on that, too. However, it has to be progressive. I have said to the DWP that the offer must be authentic in terms of training and skills, and progressive—it must lead to further learning that makes people more employable, and then takes them into work.

The sixth point is the need for early intervention. When dealing with such multi-faceted problems, we need to look at disadvantage; let us be frank about that. It means using the pupil premium, announced by the new Government, in the most imaginative, creative and productive way possible, and seeing how that can leverage real outcomes for people’s subsequent progress in learning and work.

My seventh point is that the Government made a big commitment in the comprehensive spending review not just on apprenticeships, about which I will say a little more in a moment, but on community learning. Adult and community learning was protected in the CSR. I am passionate about the fact that there are different routes into learning. Some of them are informal and others formal, but we must not take the view that there is only one ladder to climb. People will return to learning, and people with a poor history in their prior experience will need a gentle approach. Small, bite-sized chunks of learning, highly accessible, very attractive and often linked to practical competencies can often be the way forward. That is why we protected both the basic skills and the adult and community learning budgets in the CSR.

Eighthly, I have already mentioned apprenticeships. I do not want to trumpet the Government’s achievements in that respect. People are right: we will need to get employers involved, which is why we sent out tens of thousands of letters last week to small businesses to get them involved in an apprenticeship programme and to back the £250 million we have put in, with a view to creating not just 50,000, or 60,000 but 75,000 more apprenticeships, which is more apprenticeships than we have ever had in Britain.

Ninth and finally, we certainly need to give institutions more flexibility. We need to make the system more responsive to the needs of such young people, and generally. A more dynamic and responsive system, shaped around employer need and driven by learning choice, can deliver the skills the country needs, and it can also change lives by changing life chances.

As a result of the initiative of my hon. Friend the Member for Banbury in securing the debate, I have done three things. First, I have asked my Department to develop a cross-departmental strategy to deal with the NEETs problem. Secondly, I am looking at simplifying the funding process for accessing the right money to run community-led projects to address NEET issues. Finally, in particular, I have asked officials to see what we can learn from job clubs in north Oxfordshire.

The issue is about the value we place on individual lives, and the value we place, too, on social mobility, social justice and social cohesion. When each feels valued, all feel valued. It is about building the big society from the bottom up—a brighter Britain where lives are illuminated by the power of learning, and a bigger Britain where all have their chance to grow.

Question put and agreed to.

13:59

Sitting adjourned.