A 17-year freeze on maintenance loan thresholds should be lifted by the government to support more people into university and improve social mobility, a House of Lords inquiry has concluded.

The cross-party Social Mobility Policy Committee published its report on 18 November, outlining what can be done to help the government reduce the “shocking” number of young people not in education, training or employment (NEETs).

The document says there has been “significant growth by 300,000 to 987,000 in the number of those classified as NEET”, meaning that one in seven young people aged 16 to 24 now fall into this category.

In particular, the committee found that the financial barriers were “increasing for those from low-income backgrounds who may wish to attend university”, with some young people unable to afford higher education.

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“Spiralling living costs, with the cut off for a maximum maintenance loan remaining frozen at its 2008 level, are creating further obstacles to social mobility,” the report says.

It calls on the government to increase the household income threshold at which a student can receive the maximum maintenance loan to match inflationary rises.

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Currently, full-time undergraduate students with a household income of up to £25,000 are eligible for the maximum additional maintenance loan.

Quoted in the report, Northumbria University vice-chancellor Andy Long said the current freeze “means that next year, a family where one parent is earning just above the national minimum wage is expected to subsidise their children when they are at university, and that is obviously absurd”.

David Willetts, president of the Resolution Foundation, described maintenance loans as “a very powerful social mobility tool”.

Earlier this year, the government committed to reintroducing maintenance grants for low-income students studying what it deems “priority courses”. The grants, which students do not have to pay back, will be funded by the proposed international student levy.

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Labour has made widening participation a cornerstone of its post-16 education and skills strategy, setting a target of two-thirds of young people going to university or starting an apprenticeship.

The government’s recently published White Paper sets out its vision for a joined-up education system that supports this.

In the report, the committee said that although the paper “is a good starting point, many issues on education and skills still need to be addressed” to improve social mobility.

Eliza Manningham-Buller, a member of the House of Lords and chair of the Social Mobility Policy Committee, said: “There are almost one million young people not in education, employment or training. This is shocking and deeply concerning both for the young people involved and society as a whole.”

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The group also recommended devolving more power and resources to local authorities, metro mayors and education providers to allow them to use their local knowledge to address rising numbers of NEETs.

“We need educational reform and the devolution of power and support to all parts of the country,” said Manningham-Buller. “Only local partnerships will create job opportunities and remove some of the barriers to social mobility.”

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The committee also said that there was “clear consensus” from interviewees during the inquiry that “this is not a time to weaken higher education” or to cap student numbers. They added that skills minister Jacqui Smith had confirmed doing so was not part of the government’s plans.

helen.packer@timeshighereducation.com