The Autumn Statement and what it means for young people
24 November 2023
As expected the Chancellor had the next general election firmly in his sights when setting out his Autumn Statement earlier this week.
London Youth summary views
There were no measures that touched directly on the voluntary or statutory youth sector. As Councils did not gain any supplementary funding this will inevitably place further strains on statutory services for children and young people. This will invariably impact on the sustainability of the current voluntary youth sector.
With respect to London specifically, London Councils are forecasting a £600m shortfall across boroughs, as set out here. Last month’s London Challenge Poverty Week was a stark reminder that the percentage of children in poverty after housing costs in London in 2021/22 was 33%. This amounts to around 700,000 children. The end of the freeze of local housing allowance imposed in 2020 is to be welcomed also. This benefit, which helps private-renting low-income households, has put a strain on one in seven of Londoners and threatened to make a further 60,000 homeless.
We welcome the acknowledgement in the “Back to Work” plan that mental health is often the single biggest barrier to people – particularly young people seeking employment. Two out of three young people who are economically inactive also have a common mental health disorder. Addressing this mental health crisis in young people is a critical issue for the UK economy. It needs to be tackled with appropriate and tailored, cross-departmental support.
We also welcome the additional £50m funding for apprenticeships, providing this is within reach of disadvantaged young people. Equality of access for all young people to enter such opportunities and at the right entry levels should be a stated goal. IPPR research earlier this year highlighted that apprenticeships are increasingly inaccessible to young people, ethnic minority groups and those in-work on low pay or in precarious contracts (i.e. entry level apprenticeships fell by 69 per cent between 2014/15 and 2021/22, while higher level apprenticeships increased by over 400 per cent).
An equally important objective for Government should be around tackling those who are disengaged completely from any economic support structures. There are hundreds of thousands of young people who feel stigma and who have had bad experiences of engaging with services, meaning that they shun claiming benefits and remain “hidden”.
We will continue to call for greater investment in equipping children and young people with the skills to thrive, and in the vital youth infrastructure which supports them.
A summary of the most relevant measures are outlined below.
Young People
- Increases in the National Living Wage and lowering of age thresholds
The National Living Wage will increase from £10.42 to £11.44 in April 2024, with the age threshold being reduced to 21 for the first time. Young people aged 18 to 21 will also see a boost with the National Living Wage increasing by £1.11 to £8.60 per hour.
- Apprenticeships and A-Levels
Apprenticeship pay is up to £6.40 from £4.30 in 2021, a 21% increase.
The Chancellor also announced plans for a £50m investment over two years. This is earmarked for apprenticeships in areas like engineering. Whilst we welcome this renewed focus we would want to see greater access for disadvantaged young people across all apprenticeship pathways.
There were no further new announcements for education or the early years, beyond October’s Conservative Party Conference plans for an Advanced British Standard to replace A-levels.
- Youth mobility schemes
The government is signing and expanding new and existing Youth Mobility Schemes to improve UK and overseas nationals’ opportunities to live, work and travel in each other’s countries.
tax thresholds will push some professions into higher tax brackets (e.g including some teachers).
“Back to Work” measures
- Universal Credit and disability benefits
Further measures impacting the most vulnerable families included a 6.7% increase in universal credit and disability benefits in line with September’s inflation rate, rather than October’s lower rate.
There was a welcome £1.3 billion financial commitment over the next five years to help nearly 700,000 people with health conditions find jobs – over 180,000 through the Universal Support Programme and nearly 500,000 more people will be offered treatment for mental health conditions and employment support.
However in a wider package of “Back to Work” measures, tougher schemes for people searching for work were announced. Punitive measures includes the implementation of mandatory work placements for the long-term unemployed, with threats to cut benefits if they do not engage within six months.
National Insurance
A centrepiece announcement was the reduction in National Insurance for workers from 12% to 10%. This will come into effect from 6th January 2024. Whilst providing an estimated saving of £450 a year for those on an average UK salary, the freeze on tax thresholds may be nullified for those pushed into higher tax brackets (e.g including some in the teaching and nursing professions).
