How do you solve a problem like youth unemployment, which has hit its highest level in Britain since 2013?
The latest data shows that there are now more than 1 million 16-24 year olds who are not in education, employment or training (NEET) across the UK.
Welfare Secretary Pat McFadden is looking across the North Sea to the Netherlands for solutions, where the NEET rate is the lowest in Europe at 4.1 per cent. This is less than a third of the UK’s rate, which stands at 13.5 per cent.
While visiting Dutch construction apprentices on a building site, McFadden noted that if Britain’s NEET rate mirrored the Dutch rate, 600,000 more young adults would be in work.
Over coffee and stroopwafels, 21-year-old Loet van Berkel told the cabinet minister about his apprenticeship as a groundworker at the major Dutch construction company BAM.
Loet was around 14 when he realised school wasn’t for him and, by 16, he was on a different path. After a short-term job at pizza chain Domino’s, he switched to construction, where he is supported by a team of people who are not only teaching him his trade but are also available to support him with anything he might need, including personal issues, which could involve discussing his housing situation or mental health.
“We talk most evenings,” Loet says, smiling at Ramon, his apprenticeship mentor.
Loet has had so much success at work that he hopes BAM will keep him on. He’s also been able to move out of his parents’ house and is now renting his own place.
Work and Pensions Secretary Pat McFadden visits Dutch apprentices on a construction sitePrime Minister Sir Keir Starmer has struggled to gain support from within his own party to reform Britain’s welfare system. Last autumn, McFadden’s predecessor, Liz Kendall, faced a huge rebellion from Labour MPs when she attempted to restrict Personal Independence Payments (PIP) for disabled people.
McFadden took over following a reshuffle, and he is clear that the benefits system is not working, particularly for young adults and that there are serious issues with the design of Britain’s Universal Credit system.
From BAM, we travel to Albeda College in Rotterdam, where young people aged between 16 and 25 are learning how to be chefs, lawyers, and hairdressers.
“There is a design flaw in our system, which was built into Universal Credit in the way it was designed,” McFadden said, while sampling a lunch prepared by the students.
“It is too easy for people to be signed off and written off, with them then receiving no help, no support, and no obligations.”
Independent think tank The Resolution Foundation recently published a report on the Netherlands’ welfare system – where there is more technical education and ‘wraparound’ support for young people – and warned the UK’s use of Universal Credit “may be routing people who would have previously remained on unemployment benefits towards incapacity benefits,” and locking them out of work.
As boss of the department responsible for Universal Credit, McFadden was clear that he is not ready to announce any welfare changes but explained he has concluded it is a “no support, no conditions regime” and that inactivity is “built in as a design feature” to the system.
“It’s not, as they say, a bug… it is a feature”, McFadden said. He added that he thought the “Universal Credit system was well-meant by [former Conservative Welfare Secretary] Iain Duncan Smith” but that bringing health and unemployment together in one person has created “unforeseen” problems.
A trainee chef prepares lunch at a technical college in Rotterdam (Photo: Vicky Spratt/The i Paper)At the technical college, a construction site where young apprentices were helping to lay geothermal energy pipes and at a youth hub, teachers, trainers, and support workers all said the same things: if a young person they are working with has a problem or fails to show up, they will go and find them.
This could look like “going out into the street” to find out where they are or visiting them at home to find out what’s wrong and encourage them back to their education, training or support appointment. It is, as one youth worker at the youth hub in Rotterdam put it, a “tough love” approach, but, given the Netherlands’ NEET rate, it does seem to work.
McFadden said he was stuck by the “contrast between [Universal Credit] and the Netherlands system, where it is very difficult to drop out of economic activity as a whole.”
Every time a young Dutch person looks like they might drop out of education, training or work, McFadden said he was learning that the Netherlands had set up “multiple points of intervention” where “something else kicks in” as a safety net.
“The city government kicks in, another program kicks in… the whole system is geared to these multiple interventions, which make economic inactivity a last resort in the Netherlands rather than something that is reinforced by a system failure,” he said. “That is an awfully big contrast”.
At present, Universal Credit costs around £80bn a year according to the Office for Budget Responsibility (OBR).
There will be much speculation about the direction of travel for any welfare reforms McFadden oversees in the coming months. He is currently waiting for phase two of the government’s youth unemployment tsar Alan Milburn’s report, which will make recommendations about what should change.
During his visit, McFadden did make one announcement, which may be overshadowed by concerns about defence spending following his former Cabinet colleague John Healey’s resignation:
Instead of attending the job centre, which Milburn has warned can be intimidating and unwelcoming, young NEETs will get specialist youth hubs – like the Netherlands ‘jongerenpunt’ – which will be located in football stadiums and other community facilities.
McFadden said a total of 360 “youth hubs” will be opened across Britain over the next three years, like the jongerenpunt, they will give young people access to “wraparound” support, which could include housing and mental health help.
This approach was “taking the job centre out of the job centre,” McFadden said, and “meeting young people where they are.”
Another key difference between Britain and the Netherlands’ approach to youth unemployment is devolution. The Dutch take a more local approach, which can be tailored to the specific needs of a region.
McFadden said there is “a really interesting live debate about how much of this should be done nationally, locally.” He noted that some employment support, such as the Connect to Work scheme, had already been devolved but added: “I think there’ll be further decisions to be made on this in the future.”
The desire to get welfare reforms across the line, McFadden said, had only been “reinforced” by what he had learned in the Netherlands.
“We are supposed to be the Department of Work and Pensions,” he said. “We’ve just had skills added to our remit [and that] should be an opportunity to change the question further.”
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