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Budget must get all ages involved in work, CIPD warns

Nearly a million (913,000) young people have been lost from the labour market over the last 30 years, according to CIPD analysis released today.

The falling employment rate among young people, the body warned, has highlighted a need to get people of all ages involved in the workforce.

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Chancellor Jeremy Hunt's announcements so far this year have focused on enticing the over-50s back into work.

Jon Boys, senior labour market economist for the CIPD, said long-term pressures on the UK labour market were only going to make it harder to find talent.

He said: “There are multiple challenges currently facing the UK labour market, including our ageing population, the impact of technology on jobs, and changes to immigration rules and patterns

“These are only going to become more acute, so it's critical that the government develops a clear strategy to boost labour market participation and reduce inactivity across all age groups.”

The CIPD’s analysis of ONS data found there were more 16-to-24-year-olds unemployed or inactive and wanting to work (844,355) than there are people aged between 50 and 64 in these categories (777,217). 

Boys added: “As our analysis shows, it’s important that the current focus on addressing the decline of over-50s in employment doesn’t obscure the need and opportunity to get more young people into work

“While the extension of higher education opportunities has had significant benefits, the evidence suggests there’s also a need for better vocational routes into employment to provide a viable alternative to the degree route.” 

Apprenticeship levy reform is one of the ways the body hopes government will tackle unemployment in education leavers up to age 24.

Apprenticeship opportunities have declined since the adoption of the levy system.

Since the levy was introduced in 2017 the number of apprenticeships being taken up by people under 25 has fallen by 40%.

The CIPD has called for the levy to be turned into a more flexible training and skills levy, and to increase the amount of careers advice and guidance in schools.

Steve Herbert, wellbeing and benefits director at insurance advice firm Partners&, supported the CIPD’s proposals.

He told HR magazine: “Recent government policy has effectively pushed the school leaving age two years higher, thus reducing the number of younger people economically forced into joining the labour market at an early age.

“This trend has been worsened by the lack of employers willing or able to recruit younger age employees for ‘Saturday’ jobs, and the loss of other low-skilled employments which help younger workers gain at least some employment experience at an early age.

“The CIPD is quite right to therefore call for more vocational training, particularly as part of the syllabus between ages 16 and 18, to ensure that younger workers are available and ready to undertake work just as soon as their compulsory education years are complete.”

The CIPD's full analysis is available here.