Press release

£1billion package to tackle youth unemployment

Almost £1billion will be spent to provide unemployed young people with extra help as part of a new "Youth Contract".

Almost £1billion will be spent over the next three years to provide unemployed young people with extra help as part of a new “Youth Contract”, Deputy Prime Minister Nick Clegg and Employment Minister Chris Grayling announced today.

The Youth Contract will provide nearly half-a-million new opportunities for young people, including apprenticeships and work experience placements. It also marks a substantial increase in the support and help available to young people through the Work Programme, Jobcentre Plus and Sector-Based Work Academies.

This package follows extensive discussions with businesses about the practical help Government can provide to make it easier for them to take on fresh talent.

The key measures include:

Cash payments to encourage employers to recruit young people.

  • There will be 160,000 job subsidies available worth up to £2,275 each for businesses who take on an 18-24 year-old from the Work Programme.
  • This is more than enough to cover an employer’s National Insurance contributions for a year and exceeds the recommendations by the CBI in their recent report on youth employment.

An extra 250,000 Work Experience places over the next three years, taking the total to at least 100,000 a year.

  • This will come with an offer of a Work Experience place for every 18 to 24 year-old who wants one, before they enter the Work Programme.
  • Figures show that the Work Experience scheme is proving effective, with half of under-25 year-olds coming off benefits within three months.

At least 20,000 extra incentive payments worth £1500 each for employers to take on young people as apprentices, taking the total number of payments available to 40,000 next year.

Extra support through Jobcentre Plus in the form of weekly, rather than fortnightly, signing-on meetings, more time to talk to an adviser and a National Careers Service interview.

The measures differ from previous schemes over the last decade, as they are focused on equipping young people with the skills and opportunities to gain long-term sustainable employment in the private sector.

Mr Clegg said:

The aim of the Youth Contract is to get every unemployed young person earning or learning again before long term damage is done.

This is a £1bn package and what’s different about it, is it gets young people into proper, lasting jobs in the private sector.

But it’s a contract, a two-way street: if you sign up for the job, they’ll be no signing on for the dole. You have to stick with it.

Mr Grayling said:

We are absolutely committed to making a difference to the life chances of young people. We are expanding what works and delivering that as a priority.

It demonstrates how government and business can work together to put young people on the path to employment and a self reliant future.

The Government also announced a new £150m programme to provide support to some of our most vulnerable 16-17 year olds NEET (Not in Employment, Education or Training) from 2012. This will provide vital support to help them to get back into education, an apprenticeship or a job with training.

The total amount of money available for the new initiatives will be almost £1 billion, which is in addition to existing funding for employment services.

Skills Minister John Hayes said:

By reviving apprenticeships, the Government is enabling thousands of young people build successful careers, and helping put businesses on a footing to grow and create new, sustainable employment.

We’ll continue to work with employers so that more training opportunities are created, and ambition and enterprise are recognised and rewarded.

CBI Director-General John Cridland said:

This is good news for young people up and down the country.

We’re pleased that the Government has developed our idea to incentivise businesses to take on the young unemployed.

It will encourage firms to take a gamble on a young inexperienced person and help tackle the scourge of youth unemployment.

Notes to Editors:

  1. The 160,000 wage incentives will be available over the next three years starting in 2012/13.
  2. The CBI’s report Action for Jobs, _16 November 2011, _called on the Government to introduce a “Young Britain Credit” worth £1,500 to firms taking on an unemployed person aged between 16 and 24.
  3. This will provide an additional 50,000 Work Experience or Sector-Based Work Academy places in 2012/13 on top of the 50,000 work experience and 25,000 sector-based work academies places already announced, and 100,000 places per year in 2013/14 and 2014/15. 
  4. Early analysis of Work Experience participant outcomes, 9 November 2011
  5. 20,000 additional incentive payments will be available in 2012/13, taking the total number of payments available to 40,000 in that year.
  6. Additional adviser support will be available from 3 months of a Jobseeker’s Allowance claim, with weekly, rather than fortnightly signing from 5 months of a claim. 
  7. The funding provided will be £50m in 2012/13, 2013/14 and 2014/15.  The programme will take a payment-by-results approach, providing payments on the basis of young people sustainably engaging in education or training through full-time education, an apprenticeship or work with training.

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