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proposed a similar “real jobs guarantee” to 18-24 year-olds who have been out of work for a year, with benefits being withdrawn for those who refuse to take up the offer.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
Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
News
A poster by Durham Constabulary
news
Sport
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
music
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Guru Careers: Software Developer

£35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

SThree: Trainee Recruitment Consultant / Resourcer

£18000 - £23000 per annum + Commission: SThree: As a Trainee Recruitment Consu...

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine