Posted by

John Wastnage, Policy Adviser

03 Apr 2012

Of the estimated 1.042m 16-24 year olds who are looking for work (ONS March 2012), more than 700,000 are not in full-time education. At a time in their lives when most want to learn new skills and contribute to the economy, far too many young people feel isolated, excluded and unwanted. The scarring effects of long-term unemployment at this age are well-documented.

Chamber members have been vocal in their concern about this problem. As well, as worrying about damage to the future workforce, most business leaders are also parents or grandparents, and feel a strong sense of civic duty. But for too many businesses, economic uncertainty has made it tough to hire more young people over recent months. Companies are concerned that many lack basic skills or past work experience. That translates into higher training costs and greater risks for employers.

The fact that too many young people leave formal education without the skills and work experience that employers are looking for is a serious problem that needs to be tackled in the medium-term. However, in the short-term the Youth Contract will significantly reduce those risks, and give employers more confidence to invest in young people. That said, with options for demand-side solutions constrained and given the scale of the challenge, I wonder if £1bn is enough? The Government should increase the Youth Contract budget and find ways to ensure even more young people are given the opportunity to show what they can do for British business.