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If the Netherlands and Denmark Can Help NEET Young People, Why Can't Britain?

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Despite the media furore this morning over the Daily Telegraph's front page - and the subsequent Twitter explosion - IPPR is not proposing to do away with welfare support for young people. In a our new report out today, we propose a separate welfare system for young people that focusses on getting them back into education, training or employment. Politicians of all parties need to aim for no more NEETs (those not in education, employment or training).

This method is already reducing the NEET rate in other counties, such as the Netherlands and Denmark. IPPR's report shows that over half of young people claiming ESA (and incapacity benefit) have been doing so for over a year, as have 61 per cent of under-25s on income support. Almost half do not hold GCSE-level qualifications and almost a quarter have never had a job. This proves beyond doubt that the current system is not working.

To remedy this, IPPR are proposing several reforms. A new 'youth allowance' should replace existing out of work benefits for 18-24 year olds and provide financial support for young people who need it, conditional on participation in purposeful training or intensive job search. Access to inactive benefits should be closed off for all but a very small minority.

As well as the 'youth allowance,' a new 'youth guarantee' should be established that offers young people access to further education or vocational training plus intensive support to find work. For those not learning or earning after six months, paid work experience and traineeships should be provided, with no option to refuse and continue receiving the youth allowance.

To pay for a substantial expansion of financial support for young people who are currently NEET or in further education, the report says the 'youth allowance' should be paid at a standard rate and be means tested on the basis of parental income for those under 22. This would mirror the rules for access to the higher education maintenance grant.

In line with the way that higher education maintenance grants are allocated, the highest tier of support would be offered to those whose parental income is lower than £25,000. The most recent figures show that 40 per cent of those starting higher education receive the full maintenance grant. The parental means test does not apply to young people under the age of 22 who have children, have lived away from the family home for at least three years, were in local authority care, or are irrevocably estranged from their parents. Those with parental income above £25,000 would still be eligible for varying degrees of support.

As well as reforming how welfare works for young people, the business world needs to pitch in too. Large firms should either offer apprenticeships to young people, in proportion to their size, or pay a 'youth levy' towards the costs of training young people. Resources raised should be controlled by employers, via LEPs, and used to fund vocational training and apprenticeships, potentially focused on supporting smaller firms.

As it stands, the current rate of NEETs is not reducing in line with the overall unemployment figures. This indicates our current welfare system is not equipped to give young people the support they both need and deserve, whether that's helping them to find a job, enabling them to continue their education or begin a training scheme. Radical reform is needed, but when the alternative is a generation of damaged and disillusioned young people, all political parties give serious thought to how we can abolish all but the most temporary forms of NEET-hood.