“But why don’t those social enterprises take young people on anyway if they have genuine jobs to offer? The answer is economic. Social enterprises still struggle to attract mainstream investment so they are often undercapitalised and their restricted growth means that taking on skilled staff is a process undertaken carefully, and long-term unemployed young people with limited skills pose too great a risk.”
Social Enterprise London(SEL)’s chief executive, Allison Ogden-Newton, explaining the impact of the premature demise of the Future Jobs Fund (FJF), an apparently successful but relatively expensive New Labour initiative to tackle youth unemployment. Under FJF, employers received funding from the Department of Work and Pensions (DWP) to pay young people aged under 24 at least the minimum wage for 25 hours a week for 6 months.
SEL’s Future 500 scheme enabled 164 social enterprises, including Social Spider, to employ young people through the scheme. As government funding schemes go, there was a phenomenally low level of bureaucracy involved, leaving social enterprises to focus on the challenge of offering unemployed young people what – for many – was their first experience of paid employment.
FJF was scrapped in June 2010 as the new coalition government offered an early declaration of its intent to make major cuts in public spending. Since then, youth unemployment has been rising and, in January this year, economist David Blanchflower noted that the number of unemployed 18-24 year olds reached 951,000, the highest number since comparable figures were first available in 1992.
As mentioned here, I don’t think it’s useful to claim that there’s a direct causal link between youth unemployment and the recent bouts of civil unrest in our city centres. Where there is a direct causal is between the current difficulties faced by young people looking for work and what Blachflower describes as ‘the danger these youngsters will become a lost generation’.
Blanchflower explains some of the reasons why young people are doing disproportionately badly in the current grim economic circumstances: “First, because firms operate last-in, first-out rules. Second, and more important in this recession, firms have cut hours and shifts and stopped hiring, including in the public sector, which of course hits the young hardest. It isn’t their fault.”
It’s difficult to blame employers for doing their best to continue to employ people they employ already when times are hard. The problem is that this makes an already difficult situation even more difficult for young people leaving school, college or university and trying to find their first job. The likely result is, as Blanchflower speculates, that (a substantial chunk of) a generation young people will miss out an early experience of the world of work meaning that, while most of them will work at some point, they may never catch up in terms of wages and career prospects. This is especially unfair given that they’re even less responsible than most of us for screwing up the economy in the first place.
Politicians of all parties have always been happy to rock up at an inner city community centre to bemoan a creeping moral decline linked to a pervading culture of worklessness, while happily explaining how whichever project they happen to visiting is doing such a great job of changing this dismal outlook in the local area. The fact that this rhetoric continued through years of relatively high employment may have partly served to mask the present horror. Either way, things are now officially really bad and many local projects are beyond political visiting.
Last year, Iain Duncan Smith, secretary of state at Department of Work & Pensions explained that is was ‘a sin’ for benefit claimants to fail to take up jobs. Unfortunately, there is not currently same the clarity from the government about its own responsibilities to young people looking for work.
Given what’s happened since, the abolition of the Future Jobs Fund is looking like an increasingly reckless step. So far, it doesn’t seem like any elements of the new Work Programme will offer similar low-bureaucracy, high impact methods of getting young people into work. Social enterprises are ready and waiting with the energy and ideas to help some of the nearly 1 million unemployed 18-24-year-olds break into the job market (as opposed to JD Sports). What we’re short of is cash.
While it seems unlikely that FJF will return in exactly the same form, something along similar lines – perhaps with the DWP paying a lower percentage of wage costs or focusing support on particular areas – seems increasingly vital.