Prepping young people for work is no good unless the government lowers the cost of employment to create more jobs, writes Helen Dickinson ahead of the release of the Alan Milburn’s NEET report

There is little point making young people work-ready if there are no jobs waiting for them. This is why government must address the rising costs and regulation that make entry-level jobs harder to create.

Picture a single decker bus. Forty young people, aged 16 to 24. The bus stops by the school and university; 23 get out to study. Next, it pulls up in the business district; another 12 get out for work. That leaves five young people not in education, employment or training (NEET).

This bus represents a whole generation of young people. The five people still on the bus represent nearly 1m young people who are NEET and cost the economy an eye-watering £125bn a year. A figure currently expected to rise.

But it’s more than the money. These young people miss out on the purpose and recognition that comes with a job, as well as opportunities to develop skills, build confidence and gain independence. Without experience, they struggle to find work; without work, they cannot gain experience. It’s a doom loop that risks leaving hundreds of thousands of young people behind.

Milburn report should focus on stimulating job creation

One in every eight young people is neither learning nor earning, failed by the system. They might be your child, your neighbour, your friend. We have a moral and economic duty to act.

This is what Alan Milburn’s upcoming report into Young People and Work, expected to be published next week, will set out to do. What he says, and how the government responds and acts, will determine whether this moral and economic imperative will be addressed.

Milburn will call on government to do more to prepare young people for the world of work. We need a benefits system that incentivises work. This might be helping people into part-time roles or changing the balance between in-work and out-of-work support. Doing so should reduce pressure on the welfare system and strengthen public finances.

But unless government also stimulates job creation, it simply won’t be enough. We need more jobs, including entry-level roles for those without experience or qualifications.

Retail is a vital source of these. Its 2.8m jobs offer flexible, local opportunities that don’t require qualifications. But between 2024 and 2027, retail’s employment costs will have risen by around £8.5bn. Over the same period, retail has lost over 120,000 roles. That’s a lot of full buses of young people with no job to head to.

Red tape is stifling employers

Economic growth has slowed to a crawl. The cost of employing young people has skyrocketed, so retailers have scaled back recruitment. When jobs are scarce, employers are choosy, leaving inexperienced young people at the back of the queue.

Government has two levers to boost job creation. First, put more money in people’s pockets, boosting spending power and giving employers a reason to hire. Secondly, cut the cost and risks of employing people. They must start to reverse the devastating employer National Insurance rises which have made entry-level jobs unaffordable for too many retailers. And they must ensure the implementation of new employment rights legislation avoids the adverse impacts on part-time and flexible work, so often relied upon by young people entering the workforce.

Retailers are taking action. Through Opening Shift, a BRC-DWP work experience initiative, over 50 retailers have pledged 11,000 placements, with the ambition of helping 100,000 young people into jobs. By giving young people the experience they need to get their foot on the career ladder, we can help break the cycle of unemployment. But only if these are new jobs. Simply moving the problem from one group of people to another won’t solve anything.

All eyes are now on the forthcoming Milburn report. Its recommendations must provide a turning point. But making young people work-ready is not enough. We must lower the costs of employment for businesses, and build a welfare system that rewards hard work. What the government does next will determine whether we get this generation moving or leave another million young people stuck on the bus.

Helen Dickinson is chief executive at the British Retail Consortium