The REC's response to Alan Milburn's interim report on youth inactivity

The government commissioned Young people and work: interim report on the increase in the number of young people who are not in education, employment or training (NEET), chaired by former Secretary of State for Health Alan Milburn, makes for stark reading.

The interim report was published only hours after new data showing youth NEET levels have risen yet again, to near-record highs; almost one-in-seven people aged 16 to 24 are not in education, employment or training.

As the report highlights, there are a wide range of reasons for this high and rising youth inactivity.

As the REC have pointed out, including in our submission to this report, the most crucial factor is that businesses must have the confidence to hire youth. If employers are uncertain about whether they can afford a new employee, they are unlikely to hire a promising but inexperienced young person.

As the report recognises, flexible and temporary work provide effective routes into employment for many young people, and the government must support this. The report highlights “the loss of flexible, part-time work that could be combined with study and that gave young people early, low-stakes exposure to working life.” This flexible work which is so important for young people to get a ‘foot in the door’ of the labour market must be supported by the government.

Fortunately, there are quick wins for the government to boost employers’ confidence to hire, and support flexible, temporary work. Reversing the lowering of the threshold on employer National Insurance contributions, and scrapping the proposed Guaranteed Hours scheme, would both help employers to hire more young people.

Milburn’s report also highlighted that the recent rapid rises in minimum wages for young workers has been a distinct disincentive to hire a young person. Since 2019/2020, the rate for people aged 21 to 24 has increased by 65%; for those aged 18 to 20, the rate has increased by 76%; and for those under 18 the rate has increased by an enormous 84%.

The Low Pay Commission, the Prime Minister, and the Secretary of State for Business and Trade must recognise that future increases at this rapid rate may hurt exactly the people whom the minimum wage is trying to help.

The report is a reminder that we need business, government and education providers to go harder at the problem and work more closely together. Recruiters and employers could think together about how to solve the challenge of expanding the work experience offer which has declined in recent years. Programmes such as the Restart scheme help, but employers and recruiters should be more involved in the design of these interventions. The REC’s work to connect job seekers with recruiters via Restart has supported almost 4,000 people into work. This shows the positive impact of the government collaborating with recruiters, and suggests there is more the government could do to bring recruiters into the fold on solving the NEET crisis.

This interim report focused on providing a diagnosis on the increase in the number of young people who are NEET. The next section will be a solutions phase, exploring and identifying potential changes. The REC will continue to collaborate with the review and champion recruitment businesses to build better futures for great candidates, including young people.