Youth Guarantee country by country United Kingdom March 2017
Table of Contents Table of Contents... 2 Introduction and context... 3 Commission's assessment... 4 Previous year... 9 March 2017 2
Introduction and context The Youth Guarantee has become a reality across the EU. It has facilitated structural reforms and innovation in policy design across EU Member States. This document provides extracts from official Commission documents on the implementation of the Youth Guarantee in the United Kingdom. It contains extracts from: The country report drawn by the Commission for the United Kingdom in the context of the European Semester; The country profile extracted from the October 2016 report on the Youth Guarantee and the YEI three years on. A section at the end of the document is devoted to the assessment made by the Commission the previous year. The United Kingdom presented a Youth Guarantee Implementation Plan on 3 March 2014. The United Kingdom is eligible for the Youth Employment Initiative: it has an allocation of 206.10 million euros (in current prices), with the Inner London, Merseyside, South Western Scotland, Tees Valley and Durham, and West Midlands regions eligible. March 2017 3
Commission's assessment From the 2017 Country Report (EN): "While headline labour market indicators remain robust, there are continuing skills and social challenges. Employment is high and overall unemployment low, both historically and compared to EU averages. Labour market participation, long-term and youth unemployment are all on a positive or stable path. However, high inactivity and part-time working persist." "The young face particular challenges. A recent study illustrated the strong disparity in youth unemployment rates in 2015, from a low of 7.9 % in Inverness to a high of 27.3 % in Middlesbrough and Swansea (EY, 2016). The rate of those not in employment, education and training (NEET rate) continued to decline in 2015, but it is relatively high for inactive young women aged 15-24 (8.5 %) compared to other EU Member States. In this context, the UK continues to pursue very active intervention policies with young people. Emphasis is placed on conditional earn or learn welfare policies, with little scope for passive receipt of benefits." "Higher education is booming in terms of graduate numbers and their employability. Unlike most EU countries, the proportion of graduates among the foreign-born is higher than among the native-born. Disadvantaged young people are 2.4 times less likely to enrol than those from advantaged background, with especially low enrolment among white males from state schools (UCAS, 2016). The employability of recent graduates rose in 2015, and at 89.7 % it is one of the highest in the EU. The proportion of UK-domiciled graduates finding employment within 6 months of graduating increased from 63.5 % in 2012 to 67.3 % in 2015. An exception is computer science graduates, with a relatively high 10 % unemployment rate 6 months after graduation." "Apprenticeship reform will see key developments take place from April 2017. Chief amongst these is the beginning of the apprenticeship levy (see the 2016 country report) and the operations of the Institute for Apprenticeships in England. As reported by representative groups, employers have expressed concerns about the flexibility of the new apprenticeship system, whether the digital platform will be available immediately when the levy starts, and whether existing and future nonapprenticeship related training will be recognised appropriately. The need to ensure high-quality apprenticeships should also be taken into account. Other concerns have been expressed in a number of reports, including from the UK Parliament s Public Accounts Committee. The NAO (NAO, 2016a) expressed concern that the Department for Education had not defined what would constitute success for the reformed system, including its contribution to increased productivity. It also echoes the Sainsbury report s call to clarify where strategic control responsibility will lie between government and the Institute for Apprenticeships. Issues highlighted in the 2016 country report on the characteristics of apprenticeships remain. These include the number of completions versus the number of starts, the levels of the apprenticeships undertaken, the sectors in which apprenticeships take place and the somewhat atypical age-profile of those commencing apprenticeships in the UK. The Government published its response to the Committee on 6th February 2017, accepting the Committee s recommendations." "Skills utilisation presents challenges for the UK and may contribute to low productivity. Recent publications note the high number of graduates in jobs which March 2017 4
may not utilise their high qualifications. One study (CIPD, 2016) contends that around 60 % of graduates in the UK are working in non-graduate jobs. A statistical report (ONS, 2016) notes that one-sixth of workers are overqualified for their current position, and a similar proportion are under-qualified. There has been no new official data on skills mismatches since the 2016 country report but industry surveys by the Confederation of British Industry and other bodies point to ongoing concerns regarding skills gaps and skills shortages. This is also an issue for SMEs (European Commission, 2016a)." For further youth-related matters please refer to the country report. March 2017 5
From the report The Youth Guarantee and the YEI three years on 1 : Country profile UNITED KINDGOM Key achievements: A renewed focus on an 'earn or learn' approach for young persons claiming state benefits ensures activation for this cohort. Another area of policy focus has been on maintaining engagement with young persons at risk of becoming NEET. Provision for the expansion and simplification of vocational training routes and work-based learning opportunities is underway. Both unemployed and inactive NEETs decreased more compared to adult unemployment and inactivity. Remaining challenges 2 : to improve the quality of apprenticeships in England; to invest in further outreach and activation measures targeting specific groups of NEETs, in particular those not captured by the very robust activation measures for most U-25 benefit claimants; to pursue ongoing efforts to improve basic skills. As regards the YEI, there is yet no official information sent to the Commission with regard to data on participants, either under the England or Scotland operational programmes. 1. Main trends in young people's labour market performance 2. Youth Guarantee delivery 3 The United Kingdom presented a Youth Guarantee (YG) Implementation Plan in March 2014. The UK supports the aims of the YG and continues with its existing approach, in particular the Youth Contract, a programme of tailored support to young people introduced in April 2012. Implementation is coordinated by the Department of Work and Pensions and measures target young people aged 16-24 years. Registration can be done in a local PES office or online via its website. 1 SWD(2016) 323 final 2 For more detail, see: http://ec.europa.eu/social/main.jsp?catid=1161&langid=en&intpageid=3355 3 While the UK has not established a Youth Guarantee as outlined in the Council Recommendation, it has expressed support for the aims of the Youth Guarantee and agrees with the broad approach as set out in the Council Recommendation. March 2017 6
Key measures developed in support of YG implementation include: under the Youth Contract, providing work experience placements, launching more and better quality apprenticeships, and increasing employers' engagement in the delivery of apprenticeships; along with sector-based academies, job search support, work experience placements and Mandatory Work Activity. YG monitoring data 2015 The UK did not establish a Youth Guarantee scheme along the exact lines set out in the Council Recommendation, believing that existing provision in the UK in particular the Youth Contract and additional support for 16-17 year-old NEETs were best suited to the situation and conditions in the UK. The UK s provision has many similarities with the YG scheme; but does not use the same framework. Consequently, there are no specific YG monitoring data and the figures provided refer to flows of young people aged 18-24 on and off unemployment benefits (Jobseekers Allowance and the employment related element of Universal Credit). The data therefore miss support provided to all NEETs aged 16-17 and to older NEETS not claiming unemployment benefits. Bearing this in mind, the 2015 data showed that UK provision reached only one in five NEETS aged under 25 (19.9%). Just over a fifth of those ending a benefit claim in 2015 took up an offer within 4 months. It should be noted, firstly, that UK data refer to exits within 3 months as the routine monitoring does not include a 4- month observation point and, secondly, that the figure is likely to be understated because the destination was unknown for 64.2% of leavers. Follow-up data to look at subsequent outcomes are not available. 4. 3. Youth Employment Initiative (YEI) implementation YEI allocation (euro): 206,098,124 matched by the same amount from the ESF. Key data (Update received from England only; no information about Scotland) 4 The breakdown of data by duration of participation in the YG uses <3 months (for stocks and exits) and 3-5 months (stocks only) rather than <4 months and 4-5 months as required by the Indicator Framework. This reflects the policy in the UK which does not allow dissemination of data that are not already published at national level. The breakdowns provided therefore follow those used in national data on recipients of Jobseekers Allowance which use a 13 week (3 month) monitoring point. Effectively it means that indicator values for the UK measure implementation against a 3-month target (resulting from the data available for monitoring) for delivery of offers rather than a 4 month one. March 2017 7
Number of persons in YEI-supported actions to date Number of persons who completed a YEI operation Number of persons in employment or education or training after end of the YEI support Total public financial allocation to YEI operations approved for funding (euro) n/a (YEI operations are in the early stages of delivery.) n/a n/a EUR 91 million Eligible regions: in England - Inner London, Tees Valley and Durham, Merseyside, West Midlands. In agreement with the Commission, the Managing Authority allocated 10% of the 159m funds available to English NUTS3 regions outside the eligible regions, with a youth unemployment rate in 2012 above 30%: Kingston upon Hull, Nottingham, Leicester and Thurrock. In Scotland: the entire territory. YEI programming: England: a part of a priority axis within the mono-fund ESF Operational Programme (adopted late in September 2015). Scotland: YEI is a specific priority axis within the mono-fund ESF Operational Programme. Key types of actions currently supported by YEI: - Scotland: 12-18 month long projects aimed at employment and self-employment; traineeships and long-term qualifications, national models for apprenticeships and learning places - England: the approved projects cover individualised learning, advice and guidance, work experience, intermediate labour market support, mentoring, coaching, and outreach. Reform of apprenticeship systems in the UK The UK has a devolved framework for apprenticeship training, with different systems for England, Wales, Scotland and Northern Ireland. The YEI is being used to support ongoing reforms of the apprenticeship systems. For instance, under the Modern Apprenticeship programme Scotland aims at raising the number of apprenticeships from 25,000 in 2013-2014 to 30,000 in 2020. Similarly, skills investment plans and regional skills assessments will be used to ensure that apprenticeships are closely linked to areas of economic growth and job opportunities. Particular focus will be on the creation of apprenticeships in STEM (science, technology, engineering and mathematics) subjects. March 2017 8
Previous year 2016 From the 2016 Country Report (EN) "Long-term and youth unemployment fell in 2014 and into 2015, although both remain higher than in the pre-crisis period. ( ) The youth employment situation has also improved significantly in 2015 and is favourable compared to the European Union average. The youth unemployment rate (15.2 % in Q3 2015, compared to an European Union average of 19.9 %), the NEET rate (11.9 % in 2014, compared to an average of 12.5 %), and the youth long-term unemployment rate (4.7 %, compared to an average of 7.8 %) have all decreased from their high levels during the crisis years and are gradually recovering to pre-crisis levels ( )" "In addressing the challenge of youth not in education, employment, or training (NEET), the policy focus has been on maintaining engagement with young persons at risk of becoming NEET. An example of this policy in England is increasing the school or other mandatory participation age to 18 years. Since the May 2015 general election, an "earn or learn" approach has been announced to support NEETs claiming state benefits, although it is not scheduled to be introduced before April 2017. The approach will introduce a three-week programme of support to young people to enable them to find work, an apprenticeship or training within six months. Other ongoing robust engagements include traineeships, work experience placements, sector-based work academies, the intensive activity programme, work skills pilots, the Movement to Work initiative and the Youth Unemployment Innovation Fund. The increase in the availability of apprenticeships will also contribute to the range of policy response in the area of NEETs. No new policy measures aimed at NEETs not claiming benefits have been introduced, although this group represents the larger share of NEETs." "There are ongoing outcome issues pertaining to the education system for some participants although the UK ranks close to the European Union average on a number of indicators of attainment of skills (see graph 3.2.5). Some young people in the UK, especially from disadvantaged backgrounds, leave school prematurely without the necessary numeracy and literacy skills (47). The indicator on early school leavers recorded a 3.1 pps. reduction over a four-year period, from 14.9 % in 2011 to 11.8 % in 2014, which is around the European Union average (11.1 %).( )" "Several initiatives to improve basic skills are being implemented across each of the UK countries. ( )" "Provision for expansion and simplification of vocational training routes is underway. In 2014-2015 numbers of apprenticeship starts have increased for the first time since 2010-2011 and people aged 25 and over are still the predominant age group. The push to deliver 3 million new apprenticeships by 2020 will be funded by a levy on large employers amounting to 0.5 % of an employer s pay bill starting in April 2017. The levy will be paid into an apprenticeship fund. Employers will be incentivised to offer more apprenticeships as they will be able to recoup the levy only by using the fund for training apprentices. In the best case scenario, the levy is expected to stimulate employer behaviour and influence their workforce development planning, March 2017 9
There is a danger of rebranding existing graduate programmes without effect on the productivity and skills, so monitoring the quality of apprenticeship training will be key. In November 2015, reforms to increase the transparency and decrease the complexity of technical and professional routes have been announced, with an expert report expected in March 2016." "Beyond a welcome expansion of work-based learning opportunities, the quality of apprenticeships in England also requires focus. A report on apprenticeships by the UK Government s Office for Standards in Education (Ofsted) acknowledged improvements being made, but criticised the quality of apprenticeships as "variable and poor", failing to target the skills shortages in the economy, to focus on improving quality and to engage employers, especially SMEs. Out of 190 inspected programmes, 72 were judged to require improvement and 21 were inadequate, affecting 73 000 apprentices. The report also criticised schools for not doing enough to promote apprenticeships. In addition, the level of qualification acquired through apprenticeships tends to be low. In 2014-2015 the highest level of apprenticeships made up only 4 % of total apprenticeship starts. The middle and lowest level recorded figures of 36 % and 60 % respectively. Most apprenticeships take place in the service sector, with three quarters of starts concentrated in three sectors: business, administration & law; health, public services & care; and retail & commercial enterprise. Criticism has been raised that apprenticeships are decoupled from occupations and therefore not rigorous enough 5 " "Skills policy is largely the responsibility of the devolved administrations in the UK. In Scotland, the government has emphasised the need to increase the number of apprenticeships. It aims to raise the number of apprenticeships from 25 000 in 2013-2014 to 30 000 in 2020 under its Modern Apprenticeship programme overseen by Skills Development Scotland. Under the programme, skills investment plans and regional skills assessments will be used to ensure that apprenticeships are closely linked to areas of economic growth and job opportunities. There will be a particular focus on the creation of apprenticeships in STEM (science, technology, engineering and mathematics) subjects. In Wales, under the Policy Statement on Skills and the Skills Implementation Plan, the government has developed a series of Skills Performance Measures and a Flexible Skills Programme to provide targeted interventions if recruitment and skills needs cannot be met through existing provision or there is a case for targeted intervention by the government. The government offers a number of apprenticeship programmes to raise the number of apprentices and boost skills. In Northern Ireland, the government's overarching skills policy framework is the Skills Strategy for Northern Ireland, known as 'Success through Skills Transforming Futures'. The achievement of the strategic aims and the commitment to increase the skills of the workforce, including through the development of labour market relevant apprenticeships, is delivered through the Skills to Succeed programme." "Overall, the UK does well or better than other EU countries on a number of fronts in education and training. However there are potentially weaknesses in vocational and adult skills systems that are disproportionately affecting young disadvantaged people. The apprenticeship reforms which put employers in charge of skills development will need to be monitored closely to ensure quality in addition to quantity of apprenticeships. The move towards more rigorous teaching of basic skills in schools and in post-16 education in England is a step in the right direction, with outcomes yet to be measured internationally. The education and skills policy initiatives 5 Fuller, A. and Unwin,L. (2013) Apprenticeship and the concept of occupation, Gatsby Charitable Foundation. March 2017 10
in the devolved administrations are focusing on targeted interventions and delivery will be key." For further youth-related matters please refer to the country report. Conclusions of the thematic multilateral surveillance review of the Employment Committee, December 2015: The UK supports the aims of the YG, but for subsidiarity and national specificity reasons prefers to continue with its existing approach, inter alia, the Youth Contract, with a focus on providing apprenticeships and work experience. EMCO acknowledges the significant efforts made by the UK to tackle youth unemployment and to address the challenges faced by young people, especially NEETs in accessing the labour market and the fact that measures have some innovative elements. However, further outreach and activation measures targeting specific groups of young NEETs would be welcome, and some groups will need better progression prospects. As regards the 2014 data collection, the UK has provided a limited YG data set. The UK is unable to provide data different from published Youth Contract data, due to governmental and UK Statistics Authority procedure. Consideration should be given in order to maximise contributions to future YG monitoring exercises. March 2017 11