The Lost Generation of the Big Society: Time for a Real Deal not a New Deal - Dr. Richard Williams, CEO Rathbone

This week, Dr Richard Williams, CEO of Rathbone, contributes to Indus Delta's Debate and Deliberate series.  In this article, Dr Williams argues that investment in experience needs to be at the centre of policies aimed at tackling youth unemployment. He maintains that the structural changes in the labour market have led to persistent youth unemployment and government approaches to tackling this, which focus on investment in, too often, "worthless" qualifications, have been wrong-footed and failed to improve the employment prospects of many of the young people who undertake them.

No experience, no job. No job, no experience.  This is the reality of mass youth unemployment and it is the barrier facing thousands of young people now struggling to find their place in Big Society Britain. 

Last week I visited a social enterprise in the North West which recycles and sells furniture to people in social housing, on low incomes and on benefits.  In the showroom in the centre of the town, I met Helen a young women who was an employee funded by the Future Jobs Fund.  Helen’s job was selling furniture and her enthusiasm was infectious not least because as she said herself:  “you can’t get a job round here without having experience and this is the first job I’ve been able to get”.  For the first time in a long time Helen said that she felt that she had prospects.  Now that the Future Jobs Fund has been wound up, the prospects for young people like Helen are to say the very least, diminished.

Helen lives in a town which like much of those parts of the UK which are a product of industrial Britain, is all but closed for business.  True, at the end of Helen’s Future Jobs Fund job she could get on her bike and take up Ian Duncan Smith’s challenge to move south or to somewhere else where there may be a greater prospect of converting her new skills and experience into a paid job rather than a subsidised job.  But what is also true is that, if every ‘Helen’ (who together would add up to the 1.5 million young people currently unemployed) all got on their bikes to look for work and if all the jobs available in the last quarter matched their skills and experience, there would still be a traffic jam of about 1 million young people job hunting and for whom there were no opportunities. 

During the years of Blair and Brown “youth unemployment” morphed into NEETs.  In the process what was and remains a profound issue of unemployment resulting from structural change in the labour market (youth unemployment) became an issue of personal responsibility (feral youth).  In the years of New Labour the policy narrative of youth unemployment shifted from the economic to the social:  motivation, aspiration, work readiness, educational attainment, skills.  In this sense the whole of the New Labour project in relation to education from Sure Start to Higher Education is best understood as a crude and ill-conceived variant of human capital theory.  The paper chase for qualifications, many of which are now self-evidently worthless except as passports to yet more worthless qualifications, grew massively in the New Labour years as qualifications (certification) became de facto proxy for “skills” and so national competitiveness.   Many thousands of young people are currently warehoused in the further and higher education systems pursuing vocational courses purportedly leading to qualifications which will make them job ready.  The reality is that for many this is simply an illusion on the same scale as the miss-selling of insurance, endowments and pensions that were so much a feature of the casino culture emerging in the financial services sector in the 80’s.

The UK has not had an industrial strategy since the 1980‘s when Thatcher abandoned the idea of “Society” and laid waste to what remained of Britain’s industrial infrastructure.  This is not to say that the UK should have been maintained as some kind of a museum but rather that the lack of political leadership in this sphere for over thirty years has created an issue of structural unemployment that affects about 8 million people or 25% of all UK households.  Under the political leadership of Thatcher, then Blair, then Brown and now perhaps Cameron, the UK has drifted into post-industrial recession in the grip of a collective political fantasy inspired by ideas of a knowledge economy and the loose money policies that Brown let rip to create the credit bubble that burst two years ago.

The point is that in a situation where mass structural unemployment is overlaid by the impact of recession access to experience (having had the opportunity to do something practical and to have proved your worth) is probably the asset of greatest utility in the current labour market for most young people.  In a context where jobs and opportunities are scarce it is only the ‘gold standard’ qualifications of five GCSE’s A-C and three good A levels that matter or a really have any currency.  In fact in today’s job market even those young people with these ‘qualifications’ who were once eminently attractive to employers are now up against heavily indebted graduates also job hunting for entry level casualised jobs in retailing and other parts of the service sector.

The paradox of the qualifications paper chase is that like any kind of inflation all but a few such ‘qualifications’ become simultaneously essential but useless.  When everyone has a level 2 in “something”; “somethingness” is no longer a differentiator and as such is no longer a means of securing personal competitive advantage.  Worse if you lack the social capital of pushy parents or the social networks of the the middle class;  if you come from a town or city blighted by industrial decline and intergenerational unemployment and if for whatever reason you are not one of the “gold standard” bright stars of the New Academies, you are pretty much on your own.  Experience; networks; advocates; brokers: all matter far more in today’s job market than a year, two, years, or five years following some over-engineered cod-qualification which is little more than a cash cow for the accreditation industry.

The Government’s abandonment of the Future Jobs Fund is a tragedy not for its own sake:  job creation schemes have come and gone in different guises over many years.  The tragedy is really that the Government has abandoned the idea of investing in experience before it has really even undertaken a best value review of its total social investment portfolio.  Instead of abandoning the Future Jobs Fund, there should be a massive switch of funding from the further and higher education institutions whose voracious self-interest consumes billions in the delivery of worthless pseudo vocational qualifications into bursaries and endowments that enable instead thousands of young people to get access to work, training and qualifications on the job, in the workplace and in ways that really will enhance their long term employment prospects.

The “tough lovers” in the welfare to work industry stand to make millions out of the new Work Programme.  This will turn out to have marginal impact on the big issue that is the long term structural displacement of what are now generations of young people, from the labour market.  There needs to be a new New Deal which is pragmatic and which in the era of Big Society seriously leverages the engagement of employers with young people en masse as the workforce of the future.   Young people in turn need to be given the kind of financial dowry that makes them attractive as trainees to hard pressed employers worried about margins.  With 1 million otherwise retired adults now becoming available to the jobs market and economic migration across Europe well-established it is time to rethink radically how the education and training system in the UK mitigates the competitive disadvantage of youth for young people struggling to make the transition to work.  Shifting resources on a large scale from institutions to individuals and from the classroom to the workplace would be a starting point.  Make young people empowered consumers of the education and training system by giving them the funds to purchase these as services.  Give them too the freedom to use these funds as a dowry sufficient to excite the interests and imagination of employers to stimulate a real New Deal providing both sustainable employment and training.

What the Future Jobs Fund stands for is important:  experience.  Investment in experience needs to be a major focus of policy not an afterthought:  a good deal of the further and higher education system could be scrapped overnight on a basis that would deliver better opportunities for more young people and an altogether better return to the taxpayer. 

Dr Richard Williams

Rathbone is a UK-wide voluntary youth sector organisation providing opportunities for young people to transform their life-circumstances by re-engaging with learning, discovering their ability to succeed and achieving progression to further education, training and employment.