Taking Their Chances, published by the Coalition for Young People and Social Security (COYPSS), said the transition from school to the labour market was no longer a period of opportunity and potential leading to a desired career, nor a way to increase the skills of the workforce for the economy's benefit.
Ian Sparks, chief executive of the Children's Society, which currently chairs COYPSS, said: "Urgent action needs to be taken to improve training, employment and income for 16 and 17-year-olds leaving school. The current situation will result in grave consequences for the future of young people and the national economy."
The report is calling for the Government to introduce a further education subsistence allowance and to increase the youth training allowance to a minimum of Pounds 50 a week. It also wants the return of the benefits for unemployed school-leavers abolished in 1988.
Last year around a quarter of school-leavers ended up unemployed. Of these, 85 per cent had no income because they were not eligible for income support. The Government's intention to cut Pounds 56 million from training programmes for 199596 will reduce their prospects further.
Sixty per cent of those who do get on to training schemes leave early. The report said that this was usually because they were unhappy with the way their schemes were run, but also because they did not receive appropriate training or enough money. Over the past few years, youth training allowances have been frozen at Pounds 29.50 for 16-year-olds, and at Pounds 35 for 17-year-olds.
School-leavers who can find jobs still face serious money problems, said the report. Under-18s are the only group of British workers whose average weekly wage has fallen since 1992 (by 1 per cent for men and by just under 6 per cent for women). While the report recognised and welcomed the introduction of some Government initiatives, and accepted that some problems were caused by the recession and longer-term changes in the youth labour market, it condemned the lack of coherence and co-ordination resulting from feuds between Government departments over budgets.
Areas of particular concern were the restriction of educational opportunities for the young unemployed resulting from the "21-hour rule" restriction which covers students aged 18 or over claiming income support while doing part-time vocational courses. It also found variations between FE institutions on the application of the rule.
There was also concern that the introduction of the local management meant that some schools were encouraging pupils to stay on after 16 simply to receive additional funding.
Taking Their Chances is available from The Children's Society Publications Department, Edward Rudolf House, Margery Street, London WC1X OJL, Pounds 7.95 (inc pp).