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The Milburn Review, and the politics of creating opportunity for young people
Around 800,000 young people want to work or learn but have not been able to, while another 150,000 or so are no longer looking at all. Nearly half of those in this position report a work-limiting health condition.
But this is not simply a welfare problem. It is increasingly a question about how effectively our education, skills and employment systems support young people through the transition into adult life.
That makes the review highly relevant to schools, colleges, universities, apprenticeship and training providers. It also makes the politics particularly difficult.
The fiscal challenge
There is a compelling long-term economic case for tackling youth inactivity. Higher employment means increased tax revenues, lower welfare spending and a larger workforce.
The problem for government is that the costs come first.
Serious intervention will require investment in employment support, skills, health and local delivery. Many of the financial benefits will take years to materialise.
Our expectation is that we will not see Milburn’s final recommendations before the Budget on 28 October for precisely that reason. Significant recommendations would immediately raise questions about how they will be funded when the Treasury already faces intense competing demands.
The decisions that follow the Budget may therefore prove as important as the review itself. Government will need to decide how far it is prepared to turn Milburn’s recommendations into funded policy.
The policy choice is bigger than welfare
There is another choice for government.
The review could be framed primarily around economic inactivity, welfare spending and benefit conditionality. All will form part of the debate.
But the scale and nature of the problem require a wider response.
Government needs both to prevent more young people becoming disengaged and reconnect those already outside education and employment. That brings education, health, welfare and skills policy together.
We are also starting to see where the policy focus may be heading. Existing programmes reach only part of the NEET population, particularly those already closest to the labour market. Reaching those who are more disengaged will require a different approach.
That is likely to mean a much stronger focus on local delivery, with employers, particularly SMEs, playing an important role in creating opportunities. Rather than another national programme driven from Whitehall, the emphasis is likely to be on making local labour markets and support systems work better together.
That puts mayors and combined authorities in an important position, bringing together employers, education providers, local authorities and other services around the needs of young people in their area.
Think pathways, not institutions
For the education and skills sector, the wrong response would be another argument about university versus apprenticeships, or academic versus technical education.
Demand for apprenticeships has grown significantly, but supply has not kept pace. Universities remain important drivers of social mobility, research, innovation and regional economic growth. Colleges and training providers have a critical role connecting learners to local labour markets.
The more useful question is how these different parts of the system connect.
For young people, the issue is whether there is a clear pathway from education into employment.
That means employer engagement, meaningful work experience, careers advice and entry-level opportunities. It also means looking at the points of transition where young people are most at risk of dropping out of the system.
A complicated system inevitably advantages those with the networks and support to navigate it.
What should the sector do now?
For universities, colleges, schools, apprenticeship and training providers, publication of Milburn should be seen as the beginning of the policy debate, not the end of it.
The immediate temptation will be to assess individual recommendations, identify funding implications and decide what to support or challenge.
That will not be enough.
The review has the potential to reshape what government expects from organisations supporting young people through education and into employment.
Providers will need to demonstrate how they improve destinations, work with employers, reach young people without established networks and contribute to local skills and growth priorities.
They will also need evidence of what works.
These are policy and delivery questions, but they also go to the heart of how organisations demonstrate their value to government, build their reputation and influence future policy.
The regional and SME focus makes this particularly important. Universities and colleges are major institutions within local economies. Training and apprenticeship providers often have deep employer relationships. All have an opportunity to demonstrate how their existing networks and expertise can help government deliver.
With public money tight, what follows Milburn will be a debate about priorities, evidence, delivery and value for money. Organisations that simply defend their existing part of the system risk missing the direction in which policy is moving.
Those that can demonstrate their role across the whole pathway, from education through skills and experience into sustainable employment, will have a much stronger voice.
The political interest in youth inactivity is not going away. The question for organisations across the sector is whether they wait for the final recommendations, or start making the case now for the role they can play in solving one of the Government’s most difficult policy challenges.