Evaluation of the Youth Contract for 16-17 year-olds
1 Sep 2014
Becci Newton, Principal Research Fellow
The dominant theme guiding UK labour market policy over the last decade has been to encourage labour market participation and, as a consequence, reducing the proportion of young people not in education, employment or training (NEET) is a priority. While the number of young people who are NEET has recently fallen, the youth unemployment rate remains two and a half times the adult rate and the economic downturn has had a disproportionate effect on young people. Worryingly, being NEET results in lifetime scarring, affecting the ability of individuals to ever gain a ‘toe-hold’ in the labour market (Bell and Blanchflower, 2009), as well as influencing their mental and physical wellbeing and increasing their likelihood of being involved in criminal activity (Commission on Youth Unemployment).
Combined with low skill levels, the consequences of being NEET are emphasised. Low-skilled, young people NEET are threeto- four times more likely to be unemployed in early adulthood than those with higher qualifications (Smyth and McCoy 2009).Those who do gain work earn lower wages because they enter low-skilled jobs and are the least likely to receive training, which perpetuates employment and social insecurity (Newton et al. 2005).
In recognition of the need to reduce youth unemployment and increase skill levels among young people, the government raised the age of expected participation in education and training to 17 years (from 16) and will raise this to 18 years by 2015. Young people are expected to study English and mathematics between the ages of 16 and 18 whether they pursue full-time education, an apprenticeship or job with training. While undoubtedly valuable, the impacts from these policies will take time to be demonstrated. It is commendable, therefore, that policymakers have recognised that young people currently affected by unemployment needed immediate help.
Cross-governmental support for this agenda was demonstrated when, in November 2011, the Deputy Prime Minister announced funding for the Youth Contract (YC) to support young people NEET aged 16-24. The departments for: Work and Pensions; Business, Innovation and Skills; and Education united to support a range of initiatives across the age group. The Department for Education invested £126 million over three years in a programme of intensive support targeted at disadvantaged and/or low-qualified 16-17 year olds who were NEET. This programme aimed to assist them to re-engage and participate in education, an apprenticeship, or a job with training, and it was this element of the YC that IES, in partnership with the University of Warwick and Leeds Metropolitan University, was commissioned to evaluate.
What did the Youth Contract for 16-17 year olds deliver?
Two models were established for this element of the YC. One was national, commissioned through prime providers and supply chains, and featured payment-by-results (PbR) with a focus on sustained outcomes. It was subject to strict eligibility criteria, accessible only to lowqualified young people (fewer than two A*-C GCSEs), care leavers and young offenders who were NEET.
The other model devolved funding to three core city areas where six local authorities (LAs) determined the shape and nature of delivery. Each LA established their own delivery model, some of which featured PbR. Eligibility was determined locally and while this focused on vulnerable and disadvantaged young people NEET, it was less restrictive than the national criteria.
Despite the potential diversity introduced by the two models, there was remarkable consistency in the support and services delivered. In all areas, young people worked with a key worker to assess their needs and abilities, establish a goal and work towards it through action planning. What set some areas apart was a focus on helping young people to enter the labour market (apprenticeships and jobs with training) as opposed to re-enter learning.
What was the impact of the YC on the eligible NEET population?
In light of the targeted nature of the YC for this age group, impacts were considerable. For example, we found an overall 1.8 per cent reduction in the number of 16-17 year olds NEET in England. In addition, there was a 12 percentage point increase in engagement in learning and training among national participants, an 11 percentage point increase among those in Leeds, Bradford and Wakefield and a 7 percentage point increase for participants in Newcastle and Gateshead. The highest impacts were seen for Level 1 learning and training, although impacts were also demonstrated at Level 2. And while our assessment demonstrated a negative impact of two percentage points among national participants in respect of learning and training at Level 3, this may have indicated that low qualified participants were routed into courses that better matched their needs and capabilities.
While these hard impacts are of crucial interest to policymakers, the qualitative impacts should not be overlooked. In our assessment, the YC – and specifically mentoring by key workers – made a crucial difference in raising young people’s confidence in their ability to progress, and helped them to learn about appropriate behaviour, or to deal with challenging personal or family circumstances. As a consequence, the YC achieved some major breakthroughs with young people - some of whom had experienced extended periods of being NEET and/or had become isolated from or fallen under the radar of statutory and other forms of support. In our view, the key worker model was flexible enough to support young people in a range of contexts and with differing needs.
Was the YC value for money?
On the basis of the impacts achieved on learning/training engagement, we were able to estimate the lifetime returns on earnings, health and crime reduction that would result from the qualifications young people would gain, and review these relative to the estimated costs of delivery.
The estimated net benefit arising from the national model was £12,900 per participant. Returns from core city delivery were also very positive, although in one of those they were lower due to the higher prior qualification levels of participants, and in another there were higher rates of re-engagement relative to the additional outcomes secured, which attracted increased costs. In essence, the national targeting of the YC on young people with low educational attainment increased the net social benefit arising for each participant. However, while looser targeting would, in all likelihood, have reduced the social benefits arising for each participant, it might have increased total social benefits arising from delivery as a whole, provided that a larger number of young people benefited from the programme.
To set these figures in some context, the lifetime costs to the public purse of a young offender who is NEET between 16 and 18 and becomes a persistent, lifetime offender has been estimated to be around £2,371,000, although this is the worst-case scenario among the sub-groups showing high propensity of becoming NEET in this age group (Coles et al, 2010, University of York).
What lessons arose from design and delivery of national and local programmes?
A key lesson surrounded the difficulties of identifying the cohort eligible for the national YC model. There is no single data source that consistently reports participation status and qualification levels. Therefore, to operate within the eligibility, providers had to draw on the knowledge of local stakeholders and find innovative solutions to establish contact with the target group.
Local authorities were an important source of intelligence and acted as a linchpin to delivery, so it was important to foster and secure their support in order to deliver effectively. Delivery appeared most effective when prime providers or their subcontractors also had responsibility for the provision of local guidance services or had already established close links to the local guidance providers. An overall picture emerged whereby collaborative working was a critical success factor.
The PbR associated with the national model particularly was viewed as unduly weighted on sustained outcomes in light of the resource required to identify, engage and support young people and the consequent investment this entailed from providers. It did not recognise the ‘small step’ achievements in moving young people towards full reengagement, which our previous studies have shown to be central to progression (Newton et al, 2009). In our view, an interim outcome milestone associated with these softer outcomes would better recognise the impacts achieved by YC providers.
Finally, if the national eligibility criteria had been relaxed a little, a greater number of young people could have been supported, which could have achieved greater impact on the NEET cohort and would not have unduly undermined the cost-effectiveness of the YC approach. There were valid concerns that some vulnerable and disadvantaged young people NEET could not be supported by dint of having achieved a few good GCSEs. Some flexibility on the criteria would mean these young people could also have received help.
This research was published as: Evaluation of the Youth Contract for 16-17 year olds not in education, employment or training, Newton B, Speckesser S, Nafilyan V, Maguire S, Devins D, Bickerstaffe T; Department for Education, June 2014.
 Bell D and Blanchflower D (2009), Youth Unemployment: Déjà Vu? IZA Discussion Paper No. 4705
 The ACEVO Commission on Youth Unemployment (2012) Youth unemployment: the crisis we cannot afford
 Smyth E and McCoy S (2009), Investing in Education: Combating Educational Disadvantage, Economic and Social Research Institute and Barnardos
 Newton B, Hurstfield J, Miller L, Bates P, (2005), Training a Mixed Age Workforce: Practical Tips and Guidance, Department for Work and Pensions: Age Positive
 Leeds, Bradford and Wakefield; Newcastle and Gateshead; and Liverpool
 Estimating the life-time cost of NEET: 16-18 year olds not in Education, Employment or Training, Research Undertaken for the Audit Commission
 See for example, Newton B, Levesley T, Oakley J, Fearn H, Johnson C (2009). Activity and Learning Agreement Pilots – Programme Theory Evaluation: Activity Agreements and Small Step Progression (Working Paper 5). Report RR098, Department for Children, Schools and Families