Young People: Skills (Youth Unemployment Committee Report)

Lord Watson of Invergowrie Excerpts

Wednesday 23rd November 2022 Grand Committee

[Lord Watson of Invergowrie (Lab)]

My Lords, we are indebted to the noble Lord, Lord Shipley, and the Youth Unemployment Committee for their endeavours, which have revealed much detail on the subject and resulted in a most comprehensive report. It is unfortunate that we have had to wait a full year for your Lordships to be able to debate its many positive recommendations.

The headline figures for youth unemployment have improved slightly since the report was published, but they still make grim reading. Some 634,000 young people aged 16 to 24 were economically inactive and not in full-time education in July to September this year. Youth unemployment overall may have gone down, but this has not affected the long-standing issue of disabled young people struggling to move successfully from education into work, with little impact on the disability employment gap.

I will dedicate much of my contribution to a major factor hindering a response to the problem of youth unemployment: too many young people are not receiving appropriate guidance at school on what a career can offer and what path needs to be followed to get there. The Careers and Enterprise Company has done much good work in extending the number of secondary schools delivering the Gatsby benchmarks, but I have long believed that careers education and guidance should begin in primary school. I was pleased to note that the committee reached the same conclusion.

Not nearly enough notice is taken by the DfE of the excellent and pioneering work done by a charitable organisation called Primary Futures. Developed with teachers, it connects primary schools with diverse workplace volunteers to take part in aspiration activities and talk with children about their jobs. Even allowing for the disproportionate number of 10 year-olds who want to be footballers, pop stars or YouTubers, many primary school children develop at least an outline of the career they would like to aim for. Why wait until they reach secondary school to begin that journey?

The Gatsby benchmarks were developed by Sir John Holman, whom I think the noble Lord, Lord Baker, referred to. Last year, the Government appointed him as a strategic adviser on careers guidance to Ministers in the DfE; this was necessary because one in five schools in England does not meet any of the eight Gatsby benchmarks. Only 37% of schools meet at least half of them; on average, schools meet just three. There is a serious lack of careers education, advice and guidance in schools, which disproportionately hits disadvantaged young people and those with disabilities.

The Minister will recall that, during the passage of the Skills and Post-16 Education Bill, I and other noble Lords sought to increase the Government’s proposal for the number of times schools should grant access to employers, further education colleges and others under the so-called Baker clause. She resisted that, as she did our proposal for Ofsted to withhold an “outstanding” grade from schools which restricted access to the provision of information on technical education routes. The Act has now given legal clout to provide that access. I very much hope that will see action taken against recalcitrant headteachers and MATs that think the law does not apply to them. This is about young people’s futures; they must be allowed as much diversity as possible in the options open to them.

The Minister and her officials will be aware of the report published last month by Labour’s council of skills advisers, led by my noble friend Lord Blunkett. The report called for a complete shake-up of the careers service, from school through to adult careers guidance, which should ensure that a trained careers leader is embedded in every school with responsibility for the career guidance programme, supported by and accountable to the senior leadership team. I heartily endorse that recommendation.

Apprenticeships are also a key aspect of tackling youth unemployment, because they can change lives. They also offer huge returns on investment for individuals and employers; the Centre for Social Justice showed in a 2020 report that for every £1 invested in level 3 apprenticeships, there is a £28 return to the wider economy. If used properly, they could help to plug the skills gaps our country is facing and support young people into work. The demand for apprenticeships from young people is at an all-time high, but the current apprenticeship levy system favours older learners—those over 25—by a ratio of two to one. Polling by the Centre for Social Justice found that one in six levy-paying employers uses levy funds to rebadge existing training or to accredit skills employees already have. That is not the purpose of the levy.

As recommended by the committee in its report, the Government should require employers to use the apprenticeship system to focus on young people. The incentives for employers to take on apprentices over the pandemic proved effective in boosting opportunities for young people because three-quarters of apprentices who started under this scheme were aged between 16 and 24. This scheme should be reintroduced and financed using some of the levy underspend. Since the levy was introduced in 2017, in excess of £2 billion has been returned to the Treasury. What is the point of that? A Labour Government would also use some of the unspent levy to fund other types of training, which would also benefit young people by offering modular courses and the development of functional skills to tackle key skills gaps.

I agree with the Social Market Foundation’s call for all apprenticeship opportunities to be listed on the UCAS system, perhaps by establishing and integrating local platforms. This would meet the often referenced but rarely implemented parity of esteem between the academic and technical routes open to young people. The lifetime skills guarantee is an important step towards restoring a funded entitlement for level 3 study. However, as many noble Lords emphasised during the debates on the skills Bill, there is no recognition of the value of qualifications below level 3 in creating progression pathways for young people, which is another issue highlighted in the committee report. A DfE report published last year revealed the return on investment of these qualifications and concluded that the net present value of qualifications below level 2 is higher than for level 3. Why have the Government ignored their own evidence?

In his Statement last week, the Chancellor said that

“Being pro-education is being pro-growth.”—[Official Report, Commons, 17/11/22; col. 849.]


Yet despite an extra £2.3 billion annually being announced for schools, there was no extra funding for further education. Colleges are vital providers of skills for young people entering work, yet FE funding compares extremely unfavourably with both university and school funding after a decade of funding cuts. The committee report calls for the Government to devise a new method of funding for FE, determined by student demand. I hope that the Minister will have something to say on that in her response.