Christopher Nieper is a 21st Century version of a Victorian benevolent capitalist. His profitable family fashion business is based in the struggling Derbyshire town of Alfreton, which has more than its fair share of social problems including young people without work.
Rather than stand by, Nieper took on a failing school and turned it around. Not a single 18-year-old left last year without a job or a place in further education.
He believes he has a formula that would help end the scourge of NEETS – that’s young people Not in Education, Employment or Training.
Shockingly, there are almost a million British youngsters in this predicament, which Nieper describes as a ‘terrible time bomb’.
He says: ‘The cost to the economy is unsustainable – not just in welfare payments, but in lost productivity, unfulfilled potential, and the long-term damage caused by early unemployment.’
Nieper wants a meeting with Business Secretary Jonathan Reynolds and senior Treasury officials to propose a tax rebate for firms taking on apprentices to alleviate the crisis.
High hopes: Christopher Nieper with students at the flourishing David Nieper Academy in Alfreton
Based on work commissioned from the Centre for Social Justice (CSJ), he is proposing a tax break for employers that hire an apprentice, allowing them to offset the equivalent of two days in every week’s pay against their bill.
Official data shows nearly 1 million young people aged between 16 and 24 are classified as being not in education, employment or training.
Nieper’s intervention carries authority. His father David set up the family business in 1961 and the company still makes its clothes in Alfreton, defying the trend among fashion firms to switch to lower wage operations overseas.
The business began sponsoring a local school, one of the UK’s worst performing, nine years ago. Now the David Nieper Academy is highly successful. It had no NEETs among those leaving at age 18 last year. Among that cohort, 100 per cent secured jobs, apprenticeships or further education places. The figure for 16-year-old leavers was 98.5 per cent. And he says: ‘This success can be replicated nationwide.’
If the Government fails to tackle the NEET problem, he warns, ‘we risk entrenching another generation of wasted potential, economic stagnation, and social decline’.
‘But if we succeed,’ he adds, ‘we can unlock untapped talent, drive economic growth, and ensure the UK remains competitive on the world stage.’
The latest figure for NEETs equates to one in seven of those aged 16 to 24 being ‘on the scrapheap’ sparking fears of a sharp decline in work ethic among younger generations.
Modelling by the CSJ suggests Nieper’s plan would initially cost the Government £10,166 a year for a full-time apprentice on £25,400 a year. However, after five years, the think-tank argues a typical youngster would have added a net £59,500 to the national coffers in terms of tax paid and savings on welfare. Over five years, if the number of NEETs is reduced by 52 per cent, the equivalent of returning to pre-Covid unemployment levels, the public purse could gain up to £23 billion.
Those figures are by nature speculative but there is widespread agreement on the gravity of the problem, which is being exacerbated by a rise in the minimum wage for apprentices. This is due to jump 18 per cent to £7.55 an hour from next month, making it more expensive for firms.
Businesses have also complained that the apprenticeship levy, a 0.5 per cent tax on companies with an annual pay bill of over £3 million, is not effective. They say it does not incentivise them to hire young people. Money raised from the levy goes into a pot. But the money can only be used on very specific types of training and many employers therefore find they cannot access the cash. Nieper says: ‘It’s not surprising there are nearly one million young people already on the scrapheap.’
Jamie Cater of manufacturing industry body Make UK says the Government’s success in tackling NEETs would rely on ‘better support’ for providers of apprentice training. He adds: ‘There has been a 42 per cent decline in engineering and manufacturing apprenticeships in less than a decade.
‘Much of this is accounted for by a decline in entry-level apprenticeship opportunities for young people.’ He says this often arose because the funding for education providers for apprentices is ‘inadequate’.
Fears of a catastrophic loss of work ethic among the young are also mounting.
A stark report from the Department for Work and Pensions reveals that 1.2 million 16-to-24-year-olds say they suffer with a work-limiting health condition.
Accountant PwC released figures showing one in four 18-to-24-year-olds say they had considered quitting the workforce. Poor mental health and low confidence were cited as key factors.
Around one in ten people, equivalent to 4.4 million Britons, are said to be actively considering giving up on work. Official figures show 9.3 million people, a fifth of the working-age population, were classed as ‘economically inactive’, not working or looking for a job, at the end of last year. This included 2.8 million who were out of work due to long-term sickness, a large proportion of which is mental health related.
It is also a reminder of the challenge facing Labour as it tried to reduce the UK’s ballooning benefits bill despite resistance from some backbench MPs ahead of Chancellor Rachel Reeves’ Spring Statement on Wednesday. Work and Pensions Secretary Liz Kendall last week unveiled plans to cut benefits in a bid to save £5 billion a year by the end of the decade.
Katie Johnston, Local and Devolved Government Leader at PwC, says: ‘This is a bold move which will no doubt attract criticism, but highlights the complexity of the Government’s challenge in preventing extended inactivity among those most at risk.
‘Employers and the Government must address the very real risk that many people currently in work may leave the workforce and become dependent on benefits.’
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