Though Andy Burnham has prioritised reducing youth unemployment (the number of NEETs) from the onset of his premiership, Chancellor John Healy is unlikely to be throwing any additional cash in this direction.
Part of a Youth Guarantee – originating from the 2024 manifesto, Labour’s policies includes a range of ‘job support’ initiatives, such as interview coaching, establishing local job ‘hubs ’and short-term work experience placements. There have also been regular statements promising thousands more apprenticeships, though this is something which the government doesn’t really have control over.
Few of these initiatives require significant increases in expenditure and in many cases merely repackage or rebrand what exists already. A budget of around £2.5 billion over the next three years is a pittance compared with other items of expenditure – defence spending will rise from £54bn/year to almost £80bn/year by 2029.
But one policy that could be considered more concrete is the plan to roll out and fund 6 months employment of up to 25 hours per week. This has parallels with the 2008 New Labour Social Jobs Fund implemented by Gordon Brown in the wake of the financial crash, which despite subsequent favourable analysis was abolished by the Coalition government in its first days of office.
There are still questions about the current scheme. You must have been out of work for 18 months ( the FJF required only 6 months) to qualify and must be receiving universal credit (it’s estimated that 90,000 fit this category), presumably so benefits can be cut if an individual turns down a place (up to 40% of NEETs are not claiming anything).
It will also be heavily dependent on persuading private sector employers to be involved – a job guarantee scheme would be most effective in a flourishing public sector and more so in one committed to expanding new green jobs.
There must – and rightly so – be a ‘training’ element and the placements can’t be used to replace existing staff. Unfortunately, both of these could work against the participation of smaller firms, (already hiring fewer staff), particularly in economically deprived areas where NEET rates are much higher, even if employer NI contributions would be waived.
The Greens and the TUC have both argued that the eligibility requirement should be reduced and of course, the funding should be vastly increased. The TUC has backed up its proposals by modelling the positive economic gains – for every £1 spent on the scheme, £2.69 would eventually be returned in benefits over time.
Yet these ‘Keynesian’ arguments are unlikely to penetrate the neo liberal ‘balance the books to placate the bond markets’ thinking Labour has suffocated itself with. If youth unemployment rises further, as it is expected to, it will have even fewer answers. Andy Burnham has denounced youth unemployment as a ‘moral failure’, in reality it’s an economic one.
