Flagship £1bn youth unemployment scheme branded a failure

Government figures show that only fractions of places and subsidies have been taken up

Political Editor

The Government’s flagship scheme to tackle youth unemployment has been branded a failure by its own advisers, who have urged ministers to offer a “work guarantee” to jobless under 25-year-olds.

Their call gives the Coalition a dilemma because Labour has proposed a similar “real jobs guarantee” to 18-24 year-olds who have been out of work for a year, with benefits being withdrawn for those who refuse to take up the offer.

The Social Mobility and Child Poverty Commission has questioned the value of the £1bn Youth Contract, which has been championed by Nick Clegg. It provides temporary wage subsidies to employers worth up to £2,275 if they provide a six-month “job start” for under 25s.

Funding was provided by the Coalition for 160,000 of these subsidies for three years from April 2012. But the commission discovered that only 21,000 applications were made by May this year, and only 2,070 payments made for young people completing 26 weeks on the scheme. This means that, a quarter of the way through the programme, only one eighth of the places, and one-eightieth of the subsidies, have been used.

Alan Milburn, the former Labour Cabinet minister who chairs the commission, told The Independent yesterday: “Aspects of the Youth Contract are working but not enough to make a meaningful dent in appallingly high levels of youth unemployment.  Long term joblessness has a scarring effect for life.  Government should work with employers to offer young people a guarantee of a job if they are in danger of becoming long-term unemployed.”

Although the commission has praised  the work experience placements offered under the Youth Contract, it has told ministers it is worried that “little progress” has been made on tackling youth unemployment. One third of jobless 18-24-year-olds (250,000 people) have been out of work for more than 12 months, and 15 per cent (115,000)  for more than 24 months, the highest level since 1994.

The Commission is urging ministers to set a goal of eliminating long term youth unemployment (12 months and longer) and reduce the proportion of NEETS (those not in education, employment or training) to below the European average. It is proposing a “youth credit”  payment for those who take up “high quality” work or training. It wants the Government to cap the amount of time that jobless 18-24 year-olds can spend on benefits by introducing a “job guarantee”, perhaps as part of its Work Programme.

A spokesman for Mr Clegg said: “Everyone deserves the chance to do well and get on in life, but too many young people find that opportunities are out of reach. The Deputy Prime Minister has ordered a review, chaired by the Cabinet Secretary into what we offer to young people to make the transition from school to work better.

"Tens of thousands of young people have already benefited from the Youth Contract, which offers work experience, apprenticeships and help for employers to offer young people jobs that last. Since the Youth Contract was launched in 2012, youth unemployment has fallen by 58,000.”

David Cameron has asked his Downing Street Policy Unit to look into the NEETS issue. He told the Tory conference last month that under-25s could lose their right to housing benefit and Jobseeker’s Allowance if they were not in work or training. But the Liberal Democrats are cautious about benefit sanctions and so the plans may be included in the Tory manifesto at the 2015 election. The Heywood review could lead to some changes to the Youth Contract before the election.

The commission told ministers that there are “substantial gaps” in the provision for 18-24 year-olds, saying: “The risks  must be addressed with greater urgency if progress on life chances is not to be threatened. Our judgement is that here the UK Government was too late to the party and what it is doing is so far having too limited an impact.”

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Chris Martin of Coldplay performs live for fans at Enmore Theatre on June 19, 2014 in Sydney, Australia. (Photo by Mark Metcalfe/Getty Images)
music
Sport
Dave Mackay lifts the FA Cup in 1967 having skippered Spurs to victory
football
Life and Style
Marie had fake ID, in the name of Johanna Koch, after she evaded capture by the Nazis in wartime Berlin
historyOne woman's secret life as a Jew in wartime Berlin
News
Jihadi John
newsMonikers like 'Jihadi John' make the grim sound glamorous
Arts and Entertainment
As depicted in Disney's Robin Hood, King John was cowardly, cruel, avaricious and incompetent
film
Life and Style
Travis Kalanick, the co-founder of Uber, is now worth $5.3bn
tech
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Media Sales Executives - B2B

£20000 - £50000 per annum: Recruitment Genius: Recruitment Genius Ltd continue...

Recruitment Genius: Media Sales Executives - B2B

£20000 - £50000 per annum: Recruitment Genius: Recruitment Genius Ltd continue...

Recruitment Genius: Online Media Sales Trainee

£15000 - £30000 per annum: Recruitment Genius: If you have the right attitude,...

Ashdown Group: Client Services Executive - Enfield, North London

Negotiable: Ashdown Group: Client Services Executive - Enfield, North London ...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn