With the Tories and Labour coming up with strategies to help young people off JobSeekers’ Allowance and into a job or back to the classroom, Mark Corney assesses the importance and implications of such policies.
The Conservatives and Labour are squabbling over who came up with an 18 to 21 ‘earn or learn’ strategy first.
Political squabbling aside, FE needs to become familiar with the 18 to 21 age range, and fast.
The focus on the age of 18 is explained by the fact the Coalition has decided to take forward Labour’s policy of raising the participation age to the 18th birthday from September next year.
The 18th birthday is when the duty to participate ceases but the current right to claim Jobseekers’ Allowance (JSA) begins.
The rationale for concentrating on adults until their 22nd birthday, however, is more complex to explain.
‘Earn or learn’ strategies are based on increasing the number of young people in full-time education or in jobs, preferably combined with apprenticeships or part-time FE and higher education.
The read across between full-time education and employment relates to what young people live off — in full-time education and training they receive maintenance allowances and in work they receive wages.
Obviously, it is easier to ensure that every 18 to 21-year-old rather than every 18 to 24-year-old is ‘earning or learning’ because the age group is smaller.
Equally, the cost of funding provision and maintenance will be lower — an important fact given the deficit remains greater than the combined Department for Education/Department for Business, Innovation and Skills budget.
Crucially, however, policymakers have a good base to introduce an ‘earn or learn’ strategy for 18 to 21-year-olds because 40 per cent are in full-time education compared to only 10 per cent of 22 to 24-year-olds.
Participation in full-time FE is less than 230,000 — with half of them aged 18 — because there is no maintenance support.
Participation in full-time higher education, meanwhile, is around 950,000 because maintenance loans and grants do exist and this despite loans of up to £9,000.
Importantly, about 80 per cent of full-time students in higher education are aged 18 to 21. The decision to remove the cap on student numbers in full-time higher education in 2015/16 is integral to the Coalition’s 18 to 21 ‘earn or learn’ strategy.
Alongside this measure to increase participation in full-time education by 18 to 21-year-olds above 40 per cent, the Coalition is implementing policies to increase the number in employment — but not studying full-time — beyond 37 per cent.
Expanding apprenticeships from the age of 18 should be seen as part of the ‘earning’ part of ‘earn or learn’.
Yet, there is a clear clash between expanding apprenticeships as part of
an 18 to 21 ‘earn or learn’ strategy and expecting employers to make significant mandatory cash contributions to 19+ apprenticeships.
This leaves 18 to 21-year-olds who are unemployed. Even though 200,000 claim JSA worth £57.35 per week there are a further 100,000 who are looking for work, but not eligible for the dole.
By the time of the general election, the Coalition is bound to join Labour in focussing on 18 to 21-year-olds without a level three.
And the reason will be simple enough — abolition of JSA, and in return for undertaking full-time training of up to 12 months, 18 to 21-year-olds will receive a Youth Allowance.
Clearly, the Coalition parties must consider whether unemployed 18 to 21-year-olds on the Youth Allowance should be expected to take out fee-loans for level two and level three courses given the consultation from the Department for Business, Innovation and Skills consultation to extend loans to all adults.
Similarly, Labour should rethink its policy on means-testing the 18 to 21 Youth Allowance of £57.35 per week.
The party is reading across from maintenance grants paid to full-time higher education students and JSA grants paid to unemployed young people.
Since full-time higher education students living at home with parents earning more than £42,000 receive no grant and 18 to 21-year-olds on full-time training courses would receive no Youth Allowance.
What should be remembered is that every full-time higher education student living at home irrespective of parental income is entitled to a maintenance loan of £2,800 per year or £54 per week.
Mark Corney is a policy consultant
Your thoughts