Government pays a £244,000 price tag for each young person who becomes NEET

Implementing three key reforms to reduce NEET numbers, including an ‘outreach army’ of NEET young people to find and engage the estimated 300,000 ‘hidden NEETs’, would save up to £6bn for the government in the long-term, according to a new report.

The report, ‘Closing the Youth Jobs Gap’ from youth charity Impetus finds that each additional young person who becomes NEET costs the state an average of £244,000 over their lifetime.*   

With more than 1 million young people who are currently NEET, this represents a long-term cost to the country of £244bn, more than the GDP of Greece. 

At least 300,000** of these young people are ‘hidden’ – invisible to every service designed to reach them. Recruiting NEET, or formerly NEET, young people into an ‘outreach army’ to find and engage them with support into employment would open doors that Jobcentre appointments never will. It would also offer NEET young people themselves paid training and employment.

This measure is estimated to cost roughly £414m over five years, and – enacted as part of a £570m package of three reforms – would more than pay for itself within five years and could save the government up to £6bn in the long run based on the reduced lifetime costs of each NEET young person.*** This represents a theoretical return on investment of £10.50 for every £1 invested. 

Endorsing the report, The Rt Hon. the Lord Blunkett, said:

“The challenge before us calls for bold action. But, as this report shows, the cost of inaction is far higher than acting now. Investing in young people is not simply a moral imperative; it is an economic and social necessity. The benefits to the individual, to communities, to the economy and to the public purse repay that investment many times over.”

The three proposed reforms are:

• Launching a major community outreach programme to identify and engage the estimated 300,000 ‘hidden NEETs’ – those not in contact with the welfare and employment support system.

• Creating a new National Data Infrastructure that can identify the real-time NEET/EET status of every young person up to the age of 24.

• Supercharging Youth Hubs as the core support model to get young people back into education, training or employment.

The report contains 14 recommendations in total, designed in consultation with experts across the employment sector, and specifically tailored to reach young people from disadvantaged backgrounds, who are twice as likely to be NEET and most likely to be left behind by current support.

Susannah Hardyman MBE, CEO of Impetus said:

“There are now more than one million young people not in education, training or employment in this country, each of whom is at higher risk of long-term unemployment, lower wages, health problems, experience of the criminal justice system, or homelessness as a result. Aside from the obvious and unacceptable human cost, this is an expensive problem for the country to have.

When the lifetime cost of neither earning nor learning between the ages of 16-24 is £244,000 per young person, this is also a problem we can’t afford not to fix.

And when we know young people from disadvantaged backgrounds are twice as likely to be NEET, cost effective solutions, designed explicitly around the young people most likely to be left behind are vital.

Our recommendations will not only begin to offset the large cost to the country of the high numbers of NEET young people, but direct resource and attention towards those facing the highest barriers to rectify the structural and systemic barriers which are holding back the potential of a generation.”