A Prince’s Trust & Royal Bank of Scotland Group (RBS) report reveals cost of youth disadvantage across UK. The Cost of Exclusion report warns that the price of youth disadvantage in the UK is at a new high. This report also highlights a strong causal link between both unemployment and crime and educational underachievement and crime. For example, a one per cent reduction in unemployment or educational underachievement is estimated to lead to a one per cent reduction in the crime rate, in relation to property offences.
The new report is based on research conducted by the Centre for Economic Performance at the London School of Economics and is broken down into three main strands:
(1) The Cost of Youth Unemployment
According to the report there is a cost to the taxpayer of £22 million a week in terms of Jobseeker’s Allowance. Those claiming JSA for 12 months or longer has increased more than fourfold since before the recession – from 5,840 claimants in 2008 to more than 25,800 claimants in 2010.
On top of this, there is the cost to the economy of lost productivity. A conservative estimate for this is approximately the same amount per week again. Long-term youth unemployment has recently hit a 16-year high, with 232,000 16-to-24-year-olds who have been out of work for 12 months or more.
The report also states an upper figure for lost productivity of unemployed young people equates to £133 million, making the upper bound estimated cost of youth unemployment £155 million a week.
(2) The Cost of Youth Crime
Even though the number of convictions has reduced, the rate of imprisonment has continued to accelerate in the UK. The rate of re-offending after prison for children and young people is extremely high – about 75 per cent re-offend within two years.
The cost of youth crime is a further £23 million a week, which equates to £1.2 billion a year.
(3) The Cost of Educational Underachievement
Based on the estimated lifetime cost of an individual not having qualifications (£45,000) multiplied by the number of young people in the population who have no qualifications, the cost of educational underachievement in the UK is estimated as £22 billion for a generation. It takes into account evidence that there are high wage returns for those who stay in education – at least 10 per cent on average.
The percentage of people with no qualifications is very high. In 2009, the percentage of people aged 16-24 with no qualifications in England, Wales, Scotland and Northern Ireland respectively was 11 per cent, 12.4 per cent, 9.2 per cent and 19.3 per cent.
The UK compares unfavourably with many other countries when it comes to the percentage of young people who leave the education system with low-level qualifications.
A RBS Economist, Fionnuala Earley, said: “As the UK struggles to clear record levels of national debt and to compete on an international scale, we simply cannot afford to ignore the growing costs of youth disadvantage. By giving young people the skills and confidence they need for the workplace, we can help address the deficit, lift the load on the taxpayer and strengthen our economy and communities across the UK.”
According to the research, young people with few qualifications have been hit particularly hard by the recent recession. Martina Milburn, chief executive of The Prince’s Trust adds: “The annual cost for an individual jobseeker can be as much as £16,000. The argument for intervention and support is unquestionable.”
For the full analysis and details of The Prince’s Trust’s report please click the following Princes Trust Research Cost of Exclusion apr07 (3)
Jason McGee-Abe
Project Support Officer
