The number of young people not in education, employment or training has fallen to its lowest level for nine months, but labour market analysts warned that economic recovery was not doing enough to help one of the hardest-to-reach groups.

There were 1.07m people aged 16 to 24 classed as “Neet” in the UK in the third quarter, down 19,000 compared with April-June and down 28,000 from a year earlier, the Office for National Statistics said.

The percentage of all young people classed as Neet was 14.9 per cent, down 0.2 percentage points on the quarter and 0.3 points from a year earlier.

The fall reflects the overall decline in the UK’s jobless rate, down 0.2 points on a year ago at 7.7 per cent, but there is anxiety that the economic recovery has been slow to benefit young people.

John Philpott, director of the Jobs Economist, said: “Given the amount of high-level policy focus on youth unemployment and the broader Neet problem, it is very disappointing that the number of Neets fell by only 28,000 in the year to June and remains above 1m despite the economic recovery.” The data confirmed the needs for urgent policy change, he said.

David Cameron and Nick Clegg have asked Sir Jeremy Heywood, cabinet secretary, to examine the coalition’s strategy to tackle youth unemployment amid concern that the coalition is failing the under-25s.

The Youth Contract, launched in 2011 with great fanfare by Mr Clegg, deputy prime minister, has disappointed. The scheme was designed to help find work for young people through internships, work experience and subsidies for companies to take on new employees.

While the work experience and internships are regarded as relatively successful, few companies are taking up the government’s offer of wage subsidies. In the first year of the scheme – designed to fund jobs for 160,000 people over three years – it was used to employ fewer than 5,000 young people.

Some experts have warned that the subsidies are too low, especially in areas with long-term jobless problems. Mr Clegg wants to explore the idea of regionalising the incentives, believing take-up could be improved by giving poorer areas more money to encourage them to create jobs.

A report by the Institute for Public Policy Research said just 4 per cent of 15 to 24-year-olds in the Netherlands and 7 per cent in Denmark were Neet compared with 14 per cent in the UK.

It called for a new “youth allowance” to replace existing out-of-work benefits for 18 to 24-year-olds, conditional on participation in training or intensive job search, with access to “inactive” benefits closed off for almost all.

It urged a “youth guarantee” of access to further education or vocational training plus intensive support to find work. It said large companies should offer apprenticeships to young people in proportion to their size, or pay a “youth levy” towards the cost of training them.

Mr Philpott said the most obvious solution was “a further substantial boost to demand for youth labour probably requiring guaranteed government financed temporary job or training placements”.

The ONS said 55 per cent of Neets were looking for work and therefore classed as unemployed. The rest were classed as economically inactive. Of the total, 565,000 were women and 508,000 men.

There is concern that early motherhood, a lack of engagement at school and family traditions of female unemployment mean hundreds of thousands of young women have never had a job and will find it hard to get one.

More than half of the female Neets – 59 per cent – were economically inactive. Research for the Financial Times by the IPPR found that many are caring for others.

These young women are invisible economically, without access to the skills, training and support offered to people claiming unemployment benefits.

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