British research suggests billion dollar savings from keeping young people in employment, education and training

Government plans to ensure all 15 to 19 year olds are in education, training or work by 2006 could save taxpayers more than $1 billion, Associate Education (Tertiary Education) Minister Steve Maharey said today.

Steve Maharey is in Auckland today speaking to two conferences on work-based training and bridging education. He said ensuring young people have a viable pathway into further training and work once they leave school is a key issue raised in Skill New Zealand’s post-election briefing, which was also released today. It is estimated that up to 10,000 young people are not in the labour force or at school at present.

Steve Maharey said recent British research* shows the down-stream cost of having 10,000 young people not in education, employment or training is estimated at £970m – which, if realised at a similar level in New Zealand, would equate to savings for the New Zealand taxpayer well in excess of $1b when applied to the at-risk group of young people in this country.

“The British research tells us that investing in young people at the start of their lives also saves the taxpayer considerable sums over the course of their lives. We estimate that, conservatively, New Zealanders would save more than $1b in long term unemployment, health care, loss of tax revenue and other costs.

“We have seen significant employment growth and the lowest unemployment rate in 13 years, but there are still far too many young people unemployed. It’s vital that we ensure all young people get a good start and build their skills so that they can find meaningful employment.

“The government is working on introducing an Education and Leaving Age this term to targets this group of young people. It will involve building a variety of education, training, and employment pathways and expanding successful programmes like Modern Apprenticeships and Gateway,” Steve Maharey said.

* see Christine Godfrey, Estimating the Cost of Being “Not in Education, Employment or Training” at Age 16-18, Department for Education and Skills Research Report at http://www.dfes.gov.uk/research/data/uploadfiles/RR346.pdf