Number of NEETs continues to fall

David Kingman reports on the recent set of figures which show that the number of NEETs is continuing to declinewooden board

The number of young people who are officially classed as Not in Education, Employment or Training (NEET) is continuing to fall, according to the latest official figures from the Office for National Statistics (ONS).

Good news for young people?

The statistics show that in the third quarter of 2015, 848,000 16–24 year olds were classed as NEETs, which represents a fall of 74,000 from the previous three months and is 106,000 lower compared to the same period in 2014. This amounts to 11.7% of people in this age group, a fall of 1.3% from a year earlier.

To put these figures in context, NEET data going back to 2002 show that the proportion of this age group which is classed as such has fallen from a high of around 15% in 2011, where it peaked following the recession.

Young people who are NEET can be subdivided into two groups: the economically inactive and the unemployed. The difference between them is that people in the latter category are those who are looking for work without managing to find it, while those in the former one are not actively seeking work for some reason, such as they have caring responsibilities.

The more detailed data on NEETs referred to above offer some interesting insights into these two groups. Firstly, these data show that the number of 16–24 year olds who are classed as inactive has been falling steadily since 2010, although it appears to have spiked back up again over the past twelve months. Secondly, these data reveal that the number of unemployed NEETs – which was the category that rose dramatically post-recession – has been falling steadily ever since, from a high of over 600,000 to fewer than 400,000 today.

In other words, what appears to be happening is that more young people who were unemployed are successfully finding jobs, and the improving labour market seems to have drawn more young people who were economically inactive into looking for work as well. This suggests that Britain’s economic recovery is doing a lot to help young people, at least in terms of jobs.

…or is there more to it?

Of course, this doesn’t tell us everything about how young people are faring following the economic recovery. Clearly, there can be no room for complacency among policy-makers when there are still roughly 400,000 unemployed 16–24 year olds. Indeed, while the recent improvements may have reversed the damage done by the recession, they have only brought the jobless total back to where it stood at the start of this data series in 2002. The recent spike in economic inactivity is also a concern which needs to be better understood. Then there are the issues surrounding what types of work these young people who have succeeded in finding jobs are doing, particularly the concerns over the rise of temporary and insecure forms of employment such as zero-hours contracts, which may have proliferated in the aftermath of the recession.

The recent Autumn Statement included a major initiative which was designed to help young people transition into the job market, in the form of the new “apprenticeship levy”. This is a new tax on big businesses – those with payroll bills of over £3 million – which will be used to fund government grants of up to £15,000 to enable companies to fund apprenticeship schemes for young workers.

While this could potentially provide significant new opportunities for young people, some business chiefs have expressed doubts about both the details of how this will work in practice, and whether the tax represents genuine hypothecation, or is really just an extra raid on big companies. We should all hope it does succeed, as the creation of a genuinely world-class apprenticeship system would be a major gain for Britain’s young people.