How The ‘Lost Generation’ Is Costing £1.7bn A Year

Scotland’s lost generation of young jobless people is costing the country £1.7bn every year as a result of crime, lost productivity and educational under-achievement, a report published yesterday claims.

Almost one in five young people in Scotland are not in work, education or training, according to the study carried out by the London School of Economics.

The overall annual cost to Scotland’s economy of their idleness, criminality and lost earnings is the equivalent of £340 for every man, woman and child in Scotland.

The report, published by the Royal Bank of Scotland and the Prince’s Trust Scotland, quantifies the cost of the so-called Neet (Not in Education, Employment or Training) generation.

It warns that youth unemployment is costing Scotland’s economy almost £6m-a-week in lost productivity. Paying Jobseeker’s Allowance, which is currently £91 a fortnight, to young people costs the government another £2m-a-week.

The report was based on research conducted by the Centre for Economic Performance at the LSE.

Researchers also put a price tag on youth crime: they estimate 70,000 school-age offenders enter the youth criminal justice system across the UK each year, and in Scotland this costs £92m annually.

They also calculated the cost of educational underachievement among the 35,000 young people in Scotland who do not hold any formal qualifications. This costs an estimated £1.2bn every year in lost earnings.

The report, entitled The Cost of Exclusion, was commissioned by the Princes Trust Scotland, which helped about 3500 young people in Scotland acquire new skills and find employment last year.

The charity, started by the Prince of Wales, works with young people aged between 14 and 25 who have struggled at school, been in care, are long-term unemployed or who have been in trouble with the law.

Last year more than three-quarters of all young people supported by the Prince’s Trust moved into work, education or training.

William Clark, 25, saw his life turned around by the Prince’s Trust Scotland.

Following the breakdown of his family when he was 18-years-old, he became homeless, moving from hostel to hostel and unable to find full-time employment.

A support worker suggested he look at the Prince’s Trust at an Open Day. He said: “When I found out the kind of people they were helping, I thought that could be me’.”

He took part in one of the trust’s programmes, which gave him experience in looking after people in care. As a result he was offered a part-time job with the care charity Quarriers.

He said: “I’m a completely new person. I know I can face any problems that come up, deal with them and move on.”

Geraldine Gammell, director of the Princes Trust Scotland, said: “Almost one in five young people not in work, education or training represents a dreadful waste of potential. Only by helping young people develop new skills can we make a real investment in our country.”

Absenteeism increased last year as workers took an average of seven days off sick, losing 175 million working days and costing the economy £13.4bn, according to the latest CBI survey.

However, Scots are among the most diligent workers, taking an average of six sick days each year, one fewer than the average for the UK as a whole. The research revealed that long-term absence of 20 days or more accounts for 43% of all working time lost, costing £5.8bn.
In the public sector, just over half of absence is long-term, while in the private sector this was 38%.

Short-term absences are of the most concern. The great majority of absences are genuine, but employers believe about 12% are suspect and involve staff “pulling a sickie”. That means 21 million days were lost in 2006 at a cost to the economy £1.6bn. Asked to cite the reasons behind fake illness claims, 70% of employers said workers were inclined to create unauthorised long weekends by taking Mondays or Fridays off sick, while 68% said there was a link between suspect “sickies” and holidays, and 39% said absence was linked to special events such as major sporting tournaments.

Looking at all absences, the 2006 research, which was carried out jointly between the CBI and insurance firm AXA, shows an increase on 2005 when the average employee took 6.6 days off sick, and the total number of days lost was 164 million. In 2006, absence cost £537 per employee and accounted for 3.3% of working time.

The survey also shows organisations that recognised trade unions experienced more absence – eight days compared with 5.6 days in non-unionised workplaces.