What is the ‘New Deal’ for Young People?
The New Deal for young people announced a variety of measures to support young people currently not in education, employment or training, while it also pledged incentives for employers aimed at boosting the hiring of young people. Specifically, measures have been announced including:
The announcements also sit within the context of wider activity taking place to tackle unemployment. In the Autumn, the Government announced a ‘Jobs Guarantee’ to offer six-month work placements to 18–21-year-olds on Universal Credit who have been out of education, employment or training for 18 months, and this is now being expanded to cover 18–24-year-olds. Other initiatives – including no National Insurance Contributions on employees aged under 21 or apprentices under 25, and other incentives for hiring apprentices – have also previously been announced.
Why is support being increased for young people?
The UK Government has been seeking to tackle concerning numbers of young people not in education, employment or training (known as NEETs). The number of NEETs aged 16-24 years old is near 1 million in the UK – a record level. Tackling this challenge has been seen as a major priority and the subject of policies such as Get Britain Working. High numbers of NEETs can pose difficulties for society in general and limits to growth, while NEETs are also more likely to experience unemployment, low wages and/or low quality of life later in life, according to studies.
What could the latest announcements mean for local places?
The latest announcements, particularly around financial incentives for hiring young people, could have a variety of impacts for local places and business ecosystems. Notably, the policies will increase the incentives for hiring young people and could go some way to tackling current inactivity challenges. Subsidised work experience for those that have been on Universal Credit for over 18 months could help in building skills needed for the job market and respond to skills gaps faced by many employers. The New Deal for young people has been welcomed by a variety of business and trade leaders and has significant potential to drive impacts in a challenging environment both for businesses and young people.
However, while there is potential for positive impacts from the announcements, their implementation could present a series of challenges which will also need to be mitigated for inactivity to be effectively responded to. While increased incentives may make the hiring of young people more attractive, this policy does not necessarily respond to the causes of high levels of economic inactivity. Other government policies and specific local activities will need to work together to effectively prepare both young people and businesses for the implementation of the policies. There is potential for the policy to have uneven impacts if other factors are considered, such as the availability of public transport, the capacity of education institutions and public services in local places to support access to jobs and training, and also the capacity of employers to take on additional staff. The impacts will also likely vary by sector – with new foundational apprenticeships focused on particular sectors such as construction, digital, health, social care, engineering, and now also hospitality.
How can local places prepare for the new policies?
Skills, employment and economic development teams in local places will have important roles to play in rolling out the Government’s New Deal for Young People and it will be important for collaboration between local and national authorities, academia and the private sector to make the policies effective for young people. Local teams have good understandings of key employers that may be able to support the policies through taking on apprentices, placements, or new full-time employers. Building stronger relationships with businesses in local areas will be a crucial activity to prepare for the new policies, while relationships can also be expanded between local authorities and colleges/universities to connect young people to opportunities and better link skills to market demand. Gathering up-to-date evidence locally on skills gaps is important, as well as using forward-looking data to identify future priorities and areas of opportunity.
At GC Insight, our team work with local areas across the UK to support the development of their skills and employment plans. We are currently supporting the design and implementation of several Get Britain Working plans across the UK, and our team regularly gathers evidence and prepares local strategies to support strategic responses to economic inactivity. We also support clients to develop, secure funding, and evaluate targeted interventions. Our data tool Growth Flag also provides the latest information on businesses, including those who have future growth potential, and those showing signs of financial distress. To find out more about our work supporting better evidence and interventions in skills and employment, or for a chat about the latest policy developments, connect with our team.
