David Willetts

In the inaugural lecture of the Business Services Association, David Willetts MP, the Shadow Secretary of State for Innovation, Universities and Skills, today provided a new analysis of the rise in the number of Neets - young people not in education, employment or training.

David Willetts said:

‘The story of jobs and training over the past ten years is a series of extraordinary paradoxes. Let me try to make sense of what has been going on. When it comes to young people the Government wants to focus on the modest increase in the number of young people staying on for education or training. The percentage of young people aged 16 to 18 in full-time education has grown from 56 per cent in 1997 to 61 per cent in 2006.

‘But at the same time there has been a rise in the number of young people not in education, employment or training, the so-called Neets. The proportion of 16 to 18 year olds who are Neets has grown from 8 per cent to 10 per cent since 1997. …

‘Would anyone, even Labour’s harshest critic, have forecast that after ten years of the New Deal, there would be more young people disconnected from education, jobs and training than before they started? One explanation is that the number of young people in jobs and work-based training has fallen from 36 per cent to 29 per cent. So the real problem is the decline in work-based training - that is what is driving the rise in Neets.

‘There is no reason why our country should settle for these shocking figures. There is no immutable law that makes inactivity a fact of life for young adults. It is not. Bad policy has a crucial responsibility.

‘The Government says young people need qualifications. So they fund courses to get them a vocational qualification in motorbike repair. Through the Learning and Skills Council, the Government is saying to disengaged youngsters, “If you turn up regularly at 10.50 on Tuesday mornings at a place that looks rather like the school you have been truanting from for the past two years and sit behind a desk, you can get a qualification.” But if the young people were capable of that they would not have had a problem in the first place.

‘Of course, there is some funding to help Neets get back on track, but it is impatient money which requires they be on a course within a few weeks and for some that is to expect too much too fast. That means no one takes on the difficult cases which are unlikely to meet the requirements for funding. So what I conclude is this. The Government’s preoccupation with funding skills measured by paper qualifications is a key reason why the problem of Neets is actually getting worse. The funding regime has become a barrier to reaching out to these Neets. That is why, working with Chris Grayling on our welfare-to-work strategy, we are keen to ensure more supportive and more flexible schemes can access funding which does not always need to be tied to paper qualifications. Sometimes they may be run by social enterprises. But FE Colleges themselves tell me they can do far more if only they can be liberated from the straight jacket of a funding formula from the Learning and Skills Council which ties funding so narrowly to the production of paper qualifications. This is something which we are now working on with the sector.

‘Apprenticeships are another area where things are going seriously wrong. You would not believe it from what Gordon Brown claims. In 2003, he announced apprenticeship numbers would rise to 320,000 by 2006. Today, there are 239,100 apprentices in training. Moreover, Advanced Apprentices have fallen in number from 125,000 in 2000/01 to 97,000 today. Imagine the outcry if there had been a 25 per cent drop in the number of people getting A-Levels, but that is what we’ve got with these classic apprenticeships.

‘A recent House of Lords enquiry into apprenticeships found “an unfortunate history of initiatives announced but not implemented and of decisions taken and then changed or reversed.” My party warns about the perverse effects of central targets and this is a powerful example of the damage they can do. Gordon Brown promises ever more ambitious figures for apprenticeships. But real apprenticeships are not set by government diktat - they emerge from the individual decisions of employers and young people.

‘So we need more real apprenticeships. You do not achieve that by setting artificial targets. You do that by supply-side reform - removing the barriers which currently deter many employers from offering them. There is massive pent-up demand for real apprenticeships which is not being met because of the sheer hassle and cost of setting them up and running them. So many people say to me that they wish there were more young men in particular getting training to work in, say, construction. Why do we have to import foreign workers when we have young people who are surely capable of getting trained in these trades? They are capable. And they are keen. There is plenty of evidence to show our young people want to work in construction. In 2006, there were 50,000 applications for construction apprenticeships but only 9,000 places were available.

‘These are truly shocking figures. Imagine if there were the same frustrated demand amongst young people wanting to go to university as there is for those wanting to go into construction. Out of the 500,000 young people applying for university, only 90,000 would get places. There would be an outcry. But that is what we are doing with apprenticeships. We hear a lot about how young people lack aspiration. But that is only a part of the story. Often they have aspirations that are frustrated. No wonder many give up. And, again, there is no reason we have to settle for this. I believe in progress. Things can get better.

‘The advice I get is clear - we need to cut the costs and hassle of running apprenticeships. Employers regularly complain to me about:

• the overlapping inspection regimes;
• the difficulty of building relationships with the numerous quangos;
• the LSC’s laborious registration process for staff;
• the complicated funding structures; and
• the volume of paperwork.

‘We are working with employers to get a clear understanding of these barriers so that we can tear them down.

‘At the moment the state is like a bad parent - it reflects back chaos of young people’s lives and expects results too fast. The result is that, after ten years, there are no real results at all. We have more inactive young people. We have fewer real apprenticeships. And we have less adult learning.

‘Instead of chaotic and impatient policies, we need stable and imaginative ones that spread education and opportunity at every stage and every age.’