UK misses out on £45bn GDP due to youth unemployment record
The UK must boost the employability of young people to improve economic growth, warns The Open University. The latest ONS figures on young people not in education, employment or training (NEETs) show an increase of 14,000 NEETs between April and June to hit 857,000 young people. Reducing this rate amongst 20-24 year olds could have a significant impact on the UK’s GDP. If the UK could match Germany’s rate of 10.1%, the country could reap a £45bn economic bonus.
These figures highlight the great gains which can be made through a greater focus on employability in training for young people. British employers struggling to source skills are already feeling the strain caused by a gap between training options and the needs of their business. Steve Hill, external engagement director at The Open University, believes that the UK should urgently consider more high-quality, work-based training options, which tailor skills provision to the world of work.
Steve said:
“The UK has long suffered from the so called productivity puzzle, which sees us lag behind our G7 counterparts in terms of output per worker. The NEETs problem is another facet of the fact that the skills needs of businesses up and down the country are not being met, and is of course a tragedy for a generation of young people as well.”
The recent State of the Nation report from the Social Mobility Commission urges the government to reduce the number of 16- to 18-year-old NEETs to zero by 2022.
Steve believes this must involve closer correlation between the skills employers need and the training provided to young people, he said:
“We need to adapt our skills pipeline to provide businesses with employees who have the relevant know-how and experience of the workplace – and to provide young individuals with the tools to boost their employability.”
Steve believes that work-based forms of training, including the Higher and Degree Apprenticeships which are being launched ahead of the government’s Apprenticeship Levy in April 2017, provide an opportunity for businesses and individuals alike.
Steve said:
“The potential for a £45bn boost to GDP if we can match Germany’s youth employment record should make us consider what it is that Germany is doing so well. The attitude towards vocational training is one of the biggest things which sets them apart, and that’s where the changes to apprenticeships which are taking place here are so exciting.
“The new standards for apprenticeship training have been driven by employer-led trailblazer groups, working closely with professional bodies, higher education institutions and other providers. This has put the needs of businesses at the heart of the new apprenticeship programmes.
“There’s real potential for a shift in the UK and that will be a very good thing for businesses and Britain’s young people.”