The Prime Minister has made solving the youth employment crisis one of the defining challenges of his government – and rightly so. This is not just an economic challenge; it is a social and moral imperative. Young people want to work. Businesses want to create more opportunities. The question is, how can we bring the two together?
The report, Opportunity in every postcode: Ensuring young people have options, wherever they live has been shaped by engagement with businesses across the UK about the key challenge that have made it harder for businesses to create jobs and training opportunities for young people, and therefore focuses on the role that businesses play in supporting more young people into the UK labour market.
These insights have shaped the report’s policy recommendations and identified three key steps that government must take to deliver this change:
1. Reduce the cost pressures holding back jobs and training opportunities
Cut employers NICs
Noting that age-based exemptions will likely have the smallest impact on young people’s access to opportunities, the period before the Autumn Budget could be used to design this cut for maximum impact.
Remove Renewables Obligation and Feed-in Tariff costs
This should be part as of a wider package to bring down energy bills for all businesses.
Reform business rates
This should aim to reduce the burden on growth and investment through structural reform, stronger investment incentives, and greater long-term certainty.
2. Give employers the confidence to take a chance on young people
Protect young people’s jobs through guaranteed hours decisions
Introducing a 52-week reference period and an 8-hour ‘low hours’ threshold in rules on guaranteed hourswill help protect demand for seasonal work, which many young people use and rely on to participate in the labour market.
Reestablish a tripartite dialogue to find a landing zone for the implementation of the Employment Rights Act
This approach is supported by business and workers, and its success is already visible through negotiation on the qualifying periods for ordinary unfair dismissal.
Make any removal of the youth minimum wage rate conditional on a significant reduction in the NEET rate
Most businesses pay young workers the headline rate. But removing the youth rate risks cutting jobs for the many businesses who are balancing severe cost pressures.
Make a success of Fit Note reform pilots
Following the removal of the qualifying period for Statutory Sick Pay, this will be key to protecting business confidence to hire.
Change the tax treatment of health and well-being services
This will place firms in a better position to support young people experiencing health-related barriers to work, and includes making Employee Assistance Programmes (EAPs) benefits fully tax-free.
3. Remove the barriers to delivering quality training and support that underpins successful transitions into work
Support employers with the cost of delivering work experience
The priority should be ensuring businesses can self-fund this by tackling the wider cost of doing business. But in the meantime, support towards cost pressure can help ensure young people moving through the education and training system do not miss out on these valuable opportunities.
Establish a common framework for approaching skills devolution
The objective of this should be generating consensus on key principles for bodies to think about as they deliver devolution. For example, the importance of ringfencing funding for skills, and ensuring young people, employers and training providers are not disadvantaged from sitting on devolved boundaries.
Commit to a default of multi-year funding for national and devolved skills
This will be key to ensuring employers and training providers can make strategic, long-term investments in young people and their potential.
Unlock more apprenticeship opportunities through meaningful Growth and Skills Levy reform
The end-objective of reform should be ensuring businesses can get out what they put into the Levy and in the short-term, committing to greater transparency around how Levy receipts are allocated and spent.
Shape the next stage of this work
Shape and benefit from this work by continuing to share the initiatives designed and developed by CBI members to help young people work.
This includes sharing the challenges that are making it harder for firms to create entry-level opportunities and taking part in CBI forums and expert groups such as the CBI’s Education and Skills Working Group.
For more information, please contact Evie Matthews, CBI Senior Policy Advisor, Future of Work and Skills.
