Commentary provided by Youth Employment UK CEO, Laura-Jane Rawlings
Philip Hammond delivered his autumn budget yesterday boasting that it was a budget which supports families and business in the near term; whilst setting a path to a prosperous, more open Britain; and building an economy that is ft for the future.
“By investing in the future, the Budget will ensure that every generation can look forward to a better standard of living than the one before and ensures young people have the skills they need to get on in life.”
So does this budget really invest in our young people?
The Apprenticeship Minimum Wage and National Minimum Wage has been increased, as has the tax-free personal allowance which does seem to indicate that the government is listening.
We know that there have been many cases of young people turning down apprenticeship opportunities because they cannot afford to take them. Some families rely on the benefit support they receive for having children in education (including maintenance support) yet when a young person takes up an apprenticeship these benefits can stop, putting the family into an untenable financial position. There is also the challenge that after paying for travel, clothing and subsistence the low apprenticeship wage is almost eaten away.
We understand that apprenticeships must be affordable to business, and that young apprentices in particular are in training and therefore would not qualify for equal rates of pay. However, there is a need to consider the impact of low pay on social mobility if it puts families at risk. This might be reflected in Universal Credit or in frequent minimum apprenticeship wage increases to ensure that young people are not excluded from fantastic training opportunities.
Employers should be encouraged to pay fairly for the work being done, considering the training investment and provide additional benefits (lift share, lunch provision etc) or wage increases as much as possible.
More up-front support for households on Universal Credit but what about unemployment support?
The switch to Universal Credit has caused some serious problems for low-income households, so this move is more than welcome. However, the benefits freeze remains in play, whilst the cost of living continues to rise. In a JRF Press Release we are told that “By failing to end the benefits freeze, the Government will oversee almost half a million extra people in poverty by the end of this Parliament.”
What seems to be missing is the commitment to supporting unemployed people (including young people) back into work. Following the high levels of unemployment back in 2010 the government has made a big investment in employment support programmes over the years and now “An independent report by the Westminster Policy Institute (WPI) for ERSA showed the government is planning to spend a massive 80% less on specialist employment support programmes from this year onwards.”
There was little mention of unemployment support and particularly youth unemployment which is a real worry. Is it true that this government does not think we have an unemployment problem anymore?
There are still 1.42 million people unemployed and in some areas youth unemployment levels remain 4 times higher than other groups with up to 12% youth unemployment. These of course are the numbers we know about and exclude those hidden or hiding from the labour market. The Impetus PEF Jobs Index cites that in a year nearly 2 million young people spend some time being NEET.
If we are to see a productive Britain, where young people have the skills to succeed in life, we must ensure that we support all young people. Including those young people who are Not in Employment Education or Training, and those who have fallen through the gaps need our help even more. With programmes like Talent Match coming to an end and uncertainties around Brexit and ESF funding the government needs to recognise the role it has to play in supporting and funding those who are furthest from the labour market and at severe disadvantage.
More investment in education and training
A good news story is that further funding has been made available to 6th forms where young people study an A Level in Maths or Science, to support Technical Education Reform and funding to re-train people with construction and digital skills.
The devil is in the detail when it comes to the FE funding and whether this is additional or a reminder of previous commitments. However, the investment for schools and re-training is welcome.
What I am also waiting to understand is if the Department for Education has some additional budget to support its careers strategy. It is, as we know on its way, but many experts in the sector feel unless there is clear funding behind it the strategy will be relatively ineffective in supporting young people to develop the skills and knowledge they need to move into good employment.
More homes and stamp duty
First time buyers should benefit from this budget as stamp duty gets abolished for homes under £300,000. However, creating more affordable homes needs to be the focus here, most young people feel like owning their own home is something that they wont be able to do until into their 30’s if at all, as they are dealing with university fees, low wages and/or periods of unemployment and underemployment.
Young people deserve a government that believes in them, one that recognises that with the right support young people can have the most positive impact on our communities, society and future. This government has brought in huge change in recent years – education, training, apprenticeships, welfare etc but does not seem to be prepared to invest properly in those changes so that they really work for all young people.
Key highlights from the budget
The National Living Wage for those aged 25 and over will increase from £7.50 per hour to £7.83 per hour from April 2018. Over 2 million people are expected to benefit. For a full-time worker, it represents a pay rise of over £600 a year.
The National Minimum Wage will also increase:
| 21 to 24 year olds | 18 to 20 year olds | 16 and 17 year olds | Apprentices |
| £7.38 per hour | £5.90 per hour | £4.20 per hour | £3.70 per |
The tax-free personal allowance will rise with inflation to £11,850 from April 2018
The personal allowance – the amount you earn before you start paying income tax – will rise from £11,500 to £11,850. This means that in 2018-19, a typical taxpayer will pay £1,075 less income tax than in 2010-11.
Households applying for Universal Credit will get more upfront support
Households in need who qualify for Universal Credit will be able to access a month’s worth of support within five days, via an interest-free advance, from January 2018. This can be repaid over 12 months.
Claimants will be eligible for Universal Credit from the day they apply, rather than after seven days. Housing Benefit will continue to be paid for two weeks after a Universal Credit claim.
Low-income households in areas where private rents have been rising fastest will receive an extra £280 on average in Housing Benefit or Universal Credit.
More investment in maths and science in schools
Schools will get £600 for every extra pupil who takes A level or Core maths.
£27 million will help improve how maths is taught in 3,000 schools. £49 million will go towards helping students resitting GCSE maths.
£350,000 of extra funding a year will be given to every specialist maths school that is set up across the country. The number of fully-qualified computer science teachers will also rise from 4,000 to 12,000.
£64 million for construction and digital training courses
£34 million will go towards teaching construction skills like bricklaying and plastering. £30 million will go towards digital courses using AI.
This funding is provided in advance of launching a National Retraining Scheme that will help people get new skills. It will be overseen by the government, the Trades Union Congress (TUC) and the Confederation of British Industry (CBI). They will decide on other areas of the economy where new skills and training courses are needed.
Abolishing stamp duty land tax (SDLT) on homes under £300,000 for first-time buyers from 22 November
95% of first-time buyers who pay stamp duty will benefit.
300,000 new homes a year, an amount not achieved since 1970
£15.3 billion new financial support for house building over the next five years – taking the total to at least £44 billion.
Next Steps:
- Read the full budget here
- Find out more about the benefits of becoming a Community Member
- If you are a young person looking to grow their skills take a peek at our free Young Professional Membership
