Press release

Businesses offer 21,000 jobs with support of the wage incentive

The government's wage incentive scheme has encouraged UK businesses to offer over 21,000 jobs to young people at risk of long term unemployment.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government


The government’s wage incentive scheme has encouraged UK businesses to offer over 21,000 jobs to young people at risk of long term unemployment, according to figures released today (22 July 2013).

The scheme, which offers businesses up to £2,275 for taking on a young person who has been out of work for at least 6 months, or is attached to the Work Programme, is part of the cross-government Youth Contract package of measures to tackle youth unemployment. Since the scheme’s launch in April 2012, youth unemployment has fallen by 59,000 and the number of young people claiming Jobseeker’s Allowance is down by over 67,000.

Today’s figures show:

Businesses made over 21,000 job commitments thanks to the wage incentive between June 2012 and May 2013 – taking on a young person and requesting a wage incentive claim form.

So far, wage incentives have been paid out for more than 4,690 young people. The bulk of wage incentive payments can usually only be claimed after someone has been in work for six months.

Minister for Employment Mark Hoban said:

Youth unemployment has fallen by 59,000 since the Youth Contract was launched and tens of thousands of people have benefited from work experience, apprenticeships or the wage incentive.

Through the different elements of the Youth Contract this government is delivering on our commitment to offer young people the best chance to get on in life, but we’re not complacent about the scale of the challenge still facing us.

Although take up of the incentive got off to a slow start, it is now on a clear upwards trajectory – and of those employers who have already made use of the scheme, 86% said they would be likely to take someone else who is eligible for the scheme on in the future.

Mike Cherry, National Policy Chairman, Federation of Small Businesses, said:

Federation of Small Businesses research found that a wage subsidy is the single most important thing the government can do get small firms to take on more employees, and therefore welcomes the initiative. Small businesses are committed to employing young people where possible and wage incentives can make a difference. More can always be done to make small businesses aware of the support that is available to them, and the FSB will play its part in doing so.

Tens of thousands of young people have benefited from other measures in the Youth Contract, including work experience places, apprenticeships and mentoring and extra support for the hardest to help 16 and 17 year olds.

When it launched the Youth Contract in April 2012, the government committed to review the progress of the measures on an on-going basis. Ministers will shortly announce how any money which businesses decide not to claim in wage incentives is to be reinvested in other programmes to help young people into work.

The Youth Contract includes enough money to pay 160,000 wage incentives over three years, but Ministers have been clear from the start that the policy would be kept under review to assess take-up.

Mr Hoban said:

We have vigorously promoted the wage incentive to employers, and the response has been increasingly positive.

But we’ve always been clear that we’d listen to employers and see how the policy is working. Any money which is not claimed in wage incentives will be reinvested in other programmes to help young people into work.

Katerina Rudiger, Head of Skills and Policy Campaigns at CIPD, comments:

Today’s young people are tomorrow’s workforce – so it is important that they are equipped early on with the skills and knowledge they need to get on in the changing world of work.

In order to ensure that enough high-quality opportunities are available government and employers need to work together.

Our Learning to Work programme has found widespread enthusiasm among employers for engaging with young people and giving them a helping hand. We’re glad government is working with businesses, and providing support for employers seeking to make a difference.

More information

From April 2012 up to and including May 2013 there have been 21,460 ‘job starts’ – which is the number of a wage incentive forms issued to employers when young people are recruited.

A wage incentive can only be issued where it played a part in the employer’s decision to select their candidate.

From June 2012 up to and including May 2013 wage incentive payments have been made for 4,690 young people.

The Wage Incentive is one aspect of the government’s wider ‘Youth Contract’ – a range of measures aimed at tackling youth unemployment which also includes work experience and sector based work academies.

Youth unemployment levels (in thousands)

Date 18-24 16-24
Mar-May 2012 816 1,018
Mar-May 2013 763 959
Change -53 -59

Youth claimant count

Date 18-24 claimant count monthly change
Jun-12 459,700 -4,700
Jul-12 453,400 -6,300
Aug-12 441,400 -12,000
Sep-12 435,100 -6,300
Oct-12 433,500 -1,600
Nov-12 428,900 -4,600
Dec-12 419,800 -9,100
Jan-13 417,500 -2,300
Feb-13 413,600 -3,900
Mar-13 409,200 -4,400
Apr-13 403,200 -6,000
May-13 398,500 -4,700
Jun-13 392,100 -6,400

Youth Contract wage incentive payments – experimental Statistics

Youth Contract wage incentive job starts – management information

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Published 22 July 2013