Young People: NEET

Lord Freud Excerpts

Tuesday 29th November 2011 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, we have a coherent strategy to reduce the number of 16 to 24 year-olds not in education, employment or training. This includes measures to increase the participation age and a new youth contract worth nearly £1 billion. The contract will provide more intensive support for all 18 to 24-year-olds, and builds on support that is already available through Jobcentre Plus and the work programme.

[Baroness Jones of Whitchurch]

I thank the Minister for that reply, but with a record 1.16 million young people not in education, employment or training, do the Government now acknowledge the folly of scrapping the future jobs fund, axing the educational maintenance allowance and trebling tuition fees at a time when the economy, through their own policies, was already slowing down? Despite the measures being announced today, is it not the truth that a generation of young people has been badly let down by a Government that is so out of touch that it did nothing for 18 months while youth unemployment continued to rise?

[Lord Freud]

I should like to pick up one aspect of that question, which is the nostalgia displayed for the future jobs fund. When you look at the results of the future jobs fund, you find that, two months after the period ended for a major cohort early on, about half of the people who took part were back on benefit. If you look at what happened under work experience, two months after the first cohort went through, roughly half of the people were off benefit—the same. The difference was that the future jobs fund cost £6,500 whereas the work experience cost £325—20 times cheaper. That is the difference of our activity in looking after youth. We are just as effective, but we are doing it cost-effectively.

[Baroness Brinton]

My Lords, I welcome the Government's expansion of apprenticeships, but it is wrong to assume that this on its own will lower unemployment. Currently, most apprenticeships go to young people already in jobs. Only if a job with an apprenticeship is offered to a young person currently on jobseeker’s allowance will unemployment fall. What steps are being taken to develop closer work between DWP and BIS to ensure that apprenticeships indeed go to unemployed young people?

[Lord Freud]

We are very concerned to have apprenticeships going to the people who need them most. Last week, we announced incentives for employers effectively to take an extra 20,000 people off JSA by giving incentives of £1,500 to do that. We are having a massive increase in apprenticeships. The starts have gone up to about 440,000 this year, which is up 50 per cent on the previous year.

[Lord Touhig]

My Lords, for many young people in this country, the only experience they have of full-time employment is looking for a job in the first place. When the Government's new unemployment scheme for young people is up and running, how many weeks will it take to place an unemployed youngster in work?

--- Later in debate ---

[Lord Freud]

We have a very elaborate structure to help youngsters back into the workplace. The most important element of that is the work programme, which is our new structural programme to help everyone back into work. Youngsters go into that after either nine months or, if they are regarded as particularly vulnerable, three months. That programme is designed to offer them individual support.

[Lord Roberts of Llandudno]

My Lords, does the Minister agree that the situation we are in with young people out of work is far too serious for traditional remedies and that we need some way to acknowledge the structural unemployment? In the past seven years, youth unemployment has been at double the rate of the rest of the unemployment figure. Is it not possible that we need new ways—I mentioned yesterday a Minister solely responsible for youth unemployment, or even a cross-party grouping which could tackle this in a serious way?

[Lord Freud]

My Lords, we are tackling this in a serious way. It is a very complicated issue, but the trick is to understand what has to be done to help youngsters. Only four things help youngsters: educational qualifications, apprenticeships, a job or work experience. We are trying to boost those elements massively in our youth contract.

[Baroness Symons of Vernham Dean]

My Lords, the Minister will have heard it said this morning that applications from young people to be students at university next year have fallen by 16 per cent. He has just mentioned the importance of qualifications for young people. Can he tell us why he thinks those applications have fallen by 16 per cent?

[Lord Freud]

My Lords, one effect of increased fees at universities is that youngsters realise the relative attraction of apprenticeships.

[Noble Lords]

Oh!

[Lord Freud]

There has been a substantial increase in the number of apprenticeships with, as I said, 442,000 starting in 2010-11. We are putting a lot of money towards supporting them, and this is something that other advanced economies such as Germany have concentrated on. I, for one, welcome the rebalancing of our education and support systems in this country.

[Lord Boswell of Aynho]

My Lords, given that I used to employ people, I think that I would feel more comfortable, as I hope the Minister would, about employing a person with a decent apprenticeship which has captured their imagination and given them educational attainments than somebody with a questionable degree from a less good and less vocationally related university, which may well be an inappropriate direction for their talents.

[Lord Freud]

My Lords, we have a real problem in our education system which we are aiming to correct. One of the most shocking things in the report on vocational qualifications from Professor Wolf was the number of youngsters whom we are failing with regard to vocational qualifications—350,000 16 to 18 year-olds a year. If we can get that sorted out and get those young people into good apprenticeships, we will have done a lot to solve the problem that we are all worried about.