Cost to the Economy of Government Policy on Career Guidance

16 04.13
Lizzie Taylor, Careers England

A Business Case for Strengthening Career Guidance in Schools

This discussion paper and model, written by Lizzie Taylor and published by Careers England, are a first attempt to analyze and quantify how government policy on career guidance is affecting the economy, and to propose a solution to the problems identified. There will inevitably be flaws in any such model, but it is intended to provoke more detailed analysis and wider debate.

Funding for career guidance in state secondary schools was removed in 2011 and other changes to law were made which reduced its provision in state schools. This has led to a de-skilling of young people in the UK: their knowledge and confidence about educational and career choices is rapidly eroding. Now, roughly 20% of schools have satisfactory provision of career education, information and guidance.

The economic cost of this policy to young people is estimated in this model. The cost to them in reduced and lost earnings over the coming decade is estimated at £3.2 bn. To this must be added other costs, those to the government and to the UK economy – benefits arising from higher unemployment (Job Seekers' Allowance, housing, etc), education funding, social exclusion provision, policing and healthcare. Also add to this lost output (profit, corporation tax, etc). All these could more than double the above figure. Could we be looking at a cost approaching £10bn?

Career guidance in the independent sector (7% of pupils in the UK) remains unchanged. This group continues to receive help with making the right educational choices, and with understanding and knowing how to enter the working world. As a result social inequality is increasing and social mobility is further decreasing.
The UK is at risk of steering itself into the global losers' lane in this area. Yet this change also erodes the nation's economic health and vitality in a wider and subtler way, and at the worst possible time. In this period of global upheaval and re-definition of the economic order, we need to make sure the UK does not lose out.

The paper proposes a solution. Firstly, funding for career guidance in schools should be re-instated, providing dedicated funding for career guidance. Secondly, career education and work related learning should be made a statutory duty once again.