The claim

“Long-term youth unemployment is lower than May 2010.”
Chris Grayling, 19 June 2012

The background

A shock youth unemployment statistic unearthed by researchers at the TUC bagged a number a headlines today.

The trade unionists said the number of people aged 18 to 24 who have been signing on for more than a year has gone up by a whopping 900 per cent since 2000.

But the employment minister, Chris Grayling, hit back by saying: “The TUC’s use of statistics is just plain wrong.”

He added: “Under the previous government the scale of long-term youth unemployment was hidden. People were transferred off jobseekers’ allowance temporarily through training allowances and short term jobs. We’ve stopped doing that.

“This means long-term youth unemployment is lower than May 2010.”

Is the government really being punished for being more honest than the last lot?

The analysis

There’s nothing wrong with the TUC’s numbers, which come from Office of National Statistics spreadsheets freely available here.

We want to track the length of time people have been signing on, which means we want to look at the claimant count (CLA02), not the bigger measure of “unemployment”, which includes people who may be looking for work but are not claiming benefits.

There were 1.59 million people claiming jobseeker’s allowance in April this year, the latest month for which data is available. Of those, 465,600 were aged from 18 to 24.

And of those young people, more than 60,000 had been on benefits for longer than 12 months.

That figure is, on the face of it, a pretty huge and worrying one. The count has doubled over the last six months to reach the highest total since 1997.

The TUC have chosen a fairly arbitrary start date of 2000, when there were just over 6,000 long-term claimants, to get an increase of 874 per cent increase.

But the fact is that the number of 18-24-year-olds claiming dole money for more than a year hovered between 5,000 and 10,000 for most of the last decade before shooting up in 2009. (If you chose a more obvious 10-year comparison with 2002, the increase would be even bigger).

Long-term youth unemployment reached 28,000 in May 2010 then fell in late 2010 and early 2011 before soaring again, reaching 60,800 in April this year.

So there’s no dispute that the figures look bad. What about Mr Grayling’s claim that this can all be explained by changes in the way the different governments count unemployment?

The idea is that Labour used to cook the books by giving tens of thousands of young people a temporary government-subsidised job through the Future Jobs Fund after they had been unemployed for six months, or paying them an allowance to do a training course.

In both cases they stopped getting jobseeker’s allowance, conveniently taking them out of the claimant count, and if they finished the placement and went straight back into the dole queue – which many did – they counted as a new claimant.

All this had the effect of keeping the long-term youth unemployment count artificially low, according to Mr Grayling, whereas under the new Work Programme, young people now carry on getting jobseeker’s allowance until they get a “real” job, so the claimant count is a more honest representation of the true picture.

DWP told us the number of young jobseekers claimants and people enrolled on Future Jobs Fund and training allowances added together totalled 477,000 in May 2010, whereas the equivalent figure for April 2012 is slightly lower at 470,000.

It’s possible to have some sympathy with this, but it’s only a fair comparison if you accept that the Future Jobs Fund was a dud and people who signed up to it really should have been counted as unemployed instead.

We’ve FactChecked the Future Jobs Fund before. In a nutshell, it did find jobs for tens of thousands of young people, but most of them were in the public and voluntary sector. After the six months were up, more than half the participants found themselves signing on again.

That may or not mean the idea was a failure, but the fact remains that around 40 per cent of participants were not back on benefits 14 months after they started the scheme, so for a significant proportion it appears to have been a gateway to a permanent job.

We don’t know whether these outcomes are better or worse than equivalent Work Programme schemes, because the government has declined to publish any performance statistics so far.

The verdict

Even if you accept Mr Grayling’s logic, it’s not right to say that long-term unemployment is down on 2010, since these figures of 477,000 and 470,000 refer to all claimants, not just the ones who have been signing on for more than a year.

In fairness, DWP changed the Grayling statement being given out to journalists later in the day, dropping the words “long term” and simply saying: “Youth unemployment is lower than May 2010.”

So someone made a slip of the pen, then corrected it. Fair enough. But we are going to point out the mistake, since the earlier, inaccurate claim is still all over the internet at time of writing.

Even in its new improved form, Mr Grayling’s claim needs a good deal more hard evidence than that so far offered by DWP if we’re going to take it seriously.

It’s conceivable that the demise of the Future Jobs Fund has inflated the long-term figure youth unemployment, but we don’t know by how much, and there’s every reason to believe that underlying economic trends are having far more of an effect than any change in government policy.

The Future Jobs Fund only ran from October 2009 to March 2011, and there’s no obvious correlation between those dates and the ups and downs of the long-term claimant count, which seem in the long-term to reflect the overall ups and downs of the economy.

By Patrick Worrall