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More Choices, More Chances: A Strategy to Reduce the Proportion of Young People not in Education, Employment or Training in Scotland

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Why are we concerned about NEET?

1. In the context of a strengthening labour market in the UK and expanding education and training opportunities, the rate of NEET in Scotland has remained unchanged for the past decade.

2. Looking at how Scotland stands internationally in terms of the labour market engagement of its young people reveals an interesting profile. Of course there are many variables bound up in this comparison, different school leaving ages and benefits systems for example, but as another perspective on Scotland's relative strengths and challenges it constitutes an important part of the picture.

3. The proportion of 15-19 year olds who are NEET in Scotland is high on an international comparison. 3 A breakdown of these figures, however, reveals a more complex picture of how Scotland performs. OECD data shows that, although Scotland has a high proportion NEET compared to other OECD countries, Scotland also has the highest employment rate for 15-19 year olds out of OECD countries. This apparent disparity is caused by lower education participation within Scotland compared with OECD countries. Further detail on this can be found at appendix 4.

4. The economic and social cost of NEET extends well beyond a young person's nineteenth birthday. Research indicates that young people who are NEET for a prolonged period are most likely to encounter persistent problems of worklessness and social exclusion in later life. Successfully tackling this deficit is a priority for the Executive, both to prevent enduring disadvantage in adulthood and to improve Scotland's future economic competitiveness.

5. The cost of NEET impacts on the individual, government and society as a whole. A study by the DfES published in 2002 4 estimated that the present value 5 of the additional resource cost associated with being NEET amounted to £45,000. 6 The resource cost represents the cost to the economy as a whole of failing to help a 16 to 18 year old out of the NEET group over their lifetime. The estimate attempts to place a value on additional costs of unemployment, under employment, crime, poor health, substance abuse, premature death and early motherhood. 7

6. The DfES report also sought to examine the additional cost to government of a NEET individual. This was estimated as a present value of £52,000. This figure represents the cost to government of providing the services required to support the group and provides an estimate of the value to government of addressing the NEET issue. It is important to note that this figure should not be added to the resource cost figure above as that would lead to double counting. 8

What is the nature and scale of the problem?

7. If we are to target policy effectively to reduce the size of this group, we need a more refined understanding of its make up. This is a considerable challenge: the Scottish Labour Force Survey ( LFS) headline figure of 35,000 represents a wide variety of individuals, from those with multiple barriers to those who are simply on a gap year.

8. The following graph 9 shows that the proportion of young people NEET has remained broadly unchanged since 1999. In general the cohort is male dominated, reflecting the gender spilt in both under achievement in school, and unemployment in the adult population.

Chart 1

Chart 1

9. LFS data also shows that the proportion of young people NEET increases with age: 10% of 16 year olds compared to 17.5% of 19 year olds are classified as NEET. This trend is similar for both males and females, although at 19 a greater proportion of females (19.5%) than males (15.6%) are NEET, due possibly to child and other caring responsibilities.

10. Chart 2 shows the breakdown of NEET by activity, 10 and identifies that over half the NEET group are actively seeking work ( ILO definition of unemployment), while 44% are economically inactive because they are sick, disabled, or have caring responsibilities. 11

Chart 2

Chart 2

11. Other snapshot information about the group tells us more about the profile of, and barriers facing, individuals who are NEET:

  • 37% have low level qualifications (below SVQ level 2), including 28% who have no qualifications; 12
  • 39% of the NEET group have never worked; 13
  • 14% of NEET suffer from Limiting Long Term Illness. 14

12. Whilst this headline data is helpful in providing a broad segmentation of the group, it does not capture what are the key characteristics in determining government intervention in NEET - duration and/or frequency.

13. The 35,000 figure from the LFS does not tell us to what extent the group is made up of a changing set of individuals flowing in and out of NEET status over time. Understanding the rate of churn is crucial, because a short term NEET period is not the core problem government needs to address. Rather it is either (a) sustained NEET status over an extended period (with 3 months commonly cited as significant); 15 or (b) frequent repetition of NEET status between short, episodic spells of labour market engagement.

14. This strategy is for those young people who need some degree of additional support combined with accessible, appropriate opportunities to improve their employability, their transition to adulthood and therefore their life chances. So we need to know to what extent the NEET group is dynamic, made up of different individuals flowing in and out over a shorter period and to what extent it is made up of a core of individuals who remain NEET over a medium-long term period. Data on churn within the group is limited, but the diagram below summarises the main flows in and out of the NEET group 16 between 2003 and 2004:

Status in 2004 diagram

15. This shows that:

  • of those that were NEET in 2003, 56% remained NEET and 44% moved on to employment or full-time education;
  • of those that remained NEET, a larger proportion were inactive.

16. Key messages in framing a response to the NEET challenge are:

  • A dynamic group: whilst the number of 16-19 year olds NEET remains broadly static, many of the actual individuals within the group are changing at a rapid rate;
  • But with a core cohort who do not change over time: persistent long term NEET status is a problem for a significant number of young people, but by no means 35,000. This is reinforced by the Scottish School Leavers Survey, which shows that for those aged 17 in 2003, 7% of the 2003 survey group were NEET for 6 months or more;
  • And a profile which suggests inactivity is a more pronounced feature of long term NEET than unemployment: with 70% of those 16-19 year olds claiming inactive benefits doing so for over 6 months, whereas approximately 13% of 16-19 year olds who are registered unemployed remaining so for over 6 months.

17. It is clear that the number of young people NEET in Scotland which should be of concern - in terms of those young people who might need targeted support and opportunities from government in order to progress towards the labour market - is considerably less than the 35,000 headline figure from the Labour Force Survey.

18. Later in the strategy, we will discuss the need for a national database of all 14-19 year olds in order to gauge the scale and nature of NEET in Scotland as effectively as possible. However, in the absence of such a comprehensive measure, it is still possible to arrive at a more accurate count of the 'hard core' NEET group - those who actually need support. Taking the key features identified in paragraph 16 as a starting point, we can use the Labour Force Survey to identify young people who are unemployed for 6 months or more and those who are classed as inactive and require support. On this basis, we estimate that there are around 20,000 young people NEET in Scotland who will most likely require some additional support in order to access and sustain opportunities in the labour market. 17 And it is a reduction from this baseline which we should consider a success in turning the NEET challenge around.

Who do we mean when we refer to young people who are, or are at risk of becoming, NEET?

19. There are misconceptions - as well as hard realities - about NEET status to be overcome. Some commonly held negative perceptions about young people who are NEET, most evident in 'feckless young tribe' headlines, are so persistent as to constitute barriers in their own right and an effective response must respond to them as such. Understanding better the profile of young people classed as NEET is critical if we are to target interventions more effectively.

20. The NEET group is a heterogeneous one. An individual classed as ' NEET' might be a young parent whose parental responsibilities are their key barrier to work; a young person with physical disabilities or behavioural difficulties; a young person who is the main carer for a family member; a young person on a gap year before entering university; or one who has dropped out of a college course but has yet to decide on next steps.

21. As highlighted previously, there is one sub-group of young people who are NEET who need not concern us. When the NEET experience is a benign one: a finite, transitional phase ending in a positive outcome (for example, a gap year before entering further or higher education), no intervention is required.

22. The so-called NEET group, and the challenges facing individuals within that group, might therefore be broken down as follows:

  • The hardest to help young people - with complex needs which are often clearly defined and which require intensive levels of support. The existing legislative and policy 18 framework provides a strong foundation for supporting these needs.
  • An 'intermediate' group of young people - less likely to be on the radar in terms of other more specialist or targeted interventions. This group may be 'quietly disaffected' and commonly have issues around motivation, confidence and soft skills. Less intensive, appropriately tailored support and interventions could make a massive difference to their outcomes on leaving school.
  • The 'transition/gap year' group - includes young people taking time out before progressing to a further or higher education opportunity; or in voluntary or part-time work. 19 This group - although captured in the headline NEET figure - have a benign experience of NEET.

23. Meeting the NEET challenge therefore means providing the intensive support required by the hardest to help young people, but it also means providing appropriate support and opportunities for those who are disengaging from school, and for those young people who have only been NEET for a short period but are at risk of falling into long term inactivity or into a pattern of intermittent labour market engagement.

24. Ensuring interventions are targeted effectively requires drilling down further to the characteristics and circumstances of those young people most likely to experience a negative NEET experience. In doing so, what emerges is that young people who are NEET and those at risk of becoming NEET do not spring up out of nowhere - they are likely to be on other radars: for example, non-attenders and/or low attainers will be known to schools; looked after children to social work services; young offenders to youth justice services. None of these categories are mutually exclusive and, indeed, will often overlap. 20

25. Evidence suggests that the two main factors relating to NEET are disadvantage and educational disaffection manifested by truancy, exclusion, low attainment. 21 There are also a series of individual circumstances and barriers which are strong indicators of NEET or at risk NEET status. Based on the current available evidence, we recommend that the following characteristics and sub-groups, many of which are linked, should be targeted:

CARE LEAVERS:Only 1% of looked after children go onto university compared to 50% of the general population. 22 The Executive has a CtOG target which commits to 'by 2007 ensure that at least 50% of all looked after young people leaving care have entered education, employment or training'. At 31 March 2005, 59 % of care leavers whose economic status was known, were reported as not being in employment, education or training. However, there were 1,015 care leavers (45% of all Care Leavers), who were entitled to aftercare support but for whom we did not know their economic status. 23

CARERS:1,898 16-19 year olds are young carers and NEET - around 5.8% of the total group. 24

YOUNG PARENTS:In 2002/03 there were 8,519 teenage pregnancies among 16-19 year olds. 25

OFFENDING:63% of young offenders were unemployed at the time of arrest. 26

LOW ATTAINMENT:37% of young people who are NEET have low level qualifications (below SVQ level 2), including 28% who have no qualifications. 27

PERSISTENT TRUANTS:Research 28 from England shows a quarter of those who truanted persistently in year 11 (equivalent to S4 in Scotland) were not in education, employment or training the following year.

PHYSICAL/MENTAL HEALTH PROBLEMS:around 9% young people who are NEET are inactive as a result of illness or disability.

DRUGS OR ALCOHOL ABUSE:Approximately 1,100 under 19s are in contact with drug treatment services. 29 Only 10% of those in contact with drug treatment services are in employment.

26. Available evidence on key sub-groups, and the size of these groups, who may be overrepresented in the overall NEET group is limited. For example, recent research highlighted a data gap on young black and ethnic minority people in relation to NEET. 30 Smaller numbers, together with a different composition of the Black and Minority Ethnic ( BME) population in Scotland, makes data from England inapplicable. Such data gaps will be addressed as a matter of priority; and the proposed target sub-groups may change in the future as our analysis of the group's composition and their distinct needs - and the actual NEET profile - is refined over time.

The Geographical Profile of NEET in Scotland

27. This strategy is intended to kick start a redoubled effort across Scotland to reduce the size of the NEET group in every local authority area. That said, young people aged 16 to 19 living in the 15% most deprived areas in Scotland are less likely to be in education, employment or training than those in more advantaged areas, 31 and so it is possible to identify ' NEET hotspots' across Scotland. 32

28. This analysis took five indicators which were the strongest predictors of the relative problem of NEET in a local area. Using a range of indicators is necessary given the limitations of the NEET headline data explained previously. These were: the percentage NEET (census data), benefit claimant rates, school leavers destinations, attendance rates and exclusion rates. Analysing these indicators produce a composite measure that gave a clear picture of seven areas whose NEET and related characteristics profile was significant enough to suggest they should be singled out. Based on this analysis, further detail of which can be found in appendix 2, the local authority areas proposed are Glasgow, Clackmannanshire, Dundee, East Ayrshire, North Ayrshire, Inverclyde and West Dunbartonshire. The activities anticipated in these areas are considered in Section 5.

29. A high proportion of young people NEET is a clear indication of significant structural problems in the local area. It may reflect a number of factors: deprivation; gaps and/or weaknesses in the local infrastructure for children and young people; a lack of buoyancy in local labour markets. Looking at the proportion of 16-19 year olds NEET in an area in this way starts to tease out some important differences between the national and the local NEET context.

30. A geographical targeting of NEET brings a necessary focus to those areas where making reductions locally will have a significant impact at the national level. Each local authority hotspot area will set challenging local targets for reducing NEET and, in order to meet these targets, join up approaches and funding across policy and practices for this group. 33 The Executive will make available some capacity building resource to support this activity.

Tackling worklessness for the long-term - More Choices, More Chances and Workforce Plus: an Employability Framework for Scotland

31. The challenge to reduce NEET sits within the response to the UK Government's targets on increasing engagement in the labour market and eradicating child poverty. For the Scottish Executive, it is part of the wider Closing the Opportunity Gap context which brings together targets on worklessness; health inequalities; rurality; financial exclusion, community regeneration; low attaining in school and NEET, including reducing NEET outcomes for care leavers. This strategy details the efforts required to make an impact on these last three targets in particular, all of which are focussed on ironing out inequalities in young people's prospects.

32. More Choices, More Chances - and the actions it demands - has been developed to meet the Executive's target to reduce the proportion of young people not in education, employment or training by 2008. 34 It has been produced in parallel with Workforce Plus: an Employability Framework for Scotland. In striving to turn around the great waste of potential and the barriers to economic growth which NEET and worklessness can represent, their aims are one and the same. As with the Framework, the actions proposed in this strategy will work together with the UK government's plans for welfare reform set out in the Green Paper 'A new deal for welfare: Empowering people to work'.

33. Workforce Plus sets out the fundamental principles which must underpin, and the practices which should be characteristic of, all services on offer in Scotland to help individuals enter, stay in and progress within the labour market. And, in as far as the NEET strategy tackles making employability and related services more effective for those individuals who may have most difficulty in accessing them, the messages from Workforce Plus resonate throughout it.

34. The NEET strategy draws heavily on the emphasis which Workforce Plus places on embedding the concept of employability in all relevant Executive led strategies; developing approaches which centre on the individual's needs; improving and getting better at sharing client data; the importance of measuring distance travelled towards the labour market, and the need for local partners to work together in joining up the efforts of mainstream and specialist services.

35. Like Workforce Plus, this strategy is grounded in the principles of sustainability, and stresses the changes required to turn this problem around and improve young people's life chances for the long-term. To achieve this - to tackle the NEET and indeed the worklessness challenge in the long term - it must have relevance for a wider audience than adult employability and related services. Because our approach here is both to support young people who are NEET to move closer to the labour market AND - critically - to prevent them from becoming NEET in the first place, much of the action demanded in the strategy is for organisations within or aligned to the education and children's services sectors to take forward.

36. The priority in this strategy is given to progressing young people who are NEET into education and training, rather than into jobs without training. This is the appropriate response to the low attainment characteristics of the NEET group, recognising that it is through developing their skills that young people are improving their chances of sustainable and fulfilling engagement in the labour market in the long term. And although the influence of financial reward is by no means unique to young people, in seeking to incentivise education and training opportunities at the stage when young people are taking that first step towards adult life and work, the role of financial incentives play a distinctive part in meeting the NEET challenge.

37. In short, meeting the NEET challenge means delivering in five key areas:

(i) Pre 16
(ii) Post 16
(iii) Financial incentives
(iv) The right support
(v) Joint commitment and action