Press release

Cash injection for business to boost youth jobs

The Deputy Prime Minister is calling on businesses to sign up to the government’s flagship £1 billion Youth Contract.

The Deputy Prime Minister is calling on businesses to sign up to the government’s flagship £1 billion Youth Contract so that they are ready to offer the jobs to young people in April.

Thousands of companies will today receive a letter from the Deputy Prime Minister Nick Clegg and Minister for Employment Chris Grayling, calling on them to play their part in getting young people earning or learning.

The Deputy Prime Minister is announcing details of how employers can access cash to help cover the cost of taking on fresh talent through a ‘wage subsidy’. The subsidy will be paid to companies for taking on young unemployed people and is designed to cover costs like National Insurance contributions.

The wage subsidy will:

  • Pay £2,275 to employers for every 18 - 24 year old unemployed person they employ from the Work Programme.
  • It is open to all businesses, voluntary organisations and charities.
  • Payments for the majority of business will be made after the young person has been employed for 26 weeks.
  • For smaller enterprises these payments will be staggered, with the first payment after 8 weeks and the rest after 26. This recognises that smaller businesses need a boost to their cashflow to make the jobs viable.
  • The wage incentive will also be available for part time positions, with a rate of £1,137.50 if someone is employed between 16 and 29 hours.

Deputy Prime Minister Nick Clegg said:

Getting young people earning or learning is my top priority, and that’s what the Youth Contract is going to do. This is a long-term boost to help business get young people into jobs before long-term damage is done.

Employers have a huge part to play in this and the subsidy we’re announcing today benefits business and young people.

Today I’m writing out to thousands of employers of all sizes - from global corporations to small local firms - calling on them to look at what we’re offering through the Youth Contract and sign up to offer jobs from April. This is a significant moment and a call to arms for businesses to offer long-term opportunities to young people who are out of work.

Minister for Employment Chris Grayling said:

Our primary goal is to get young people into employment. With the wage incentive we are encouraging employers to take a chance on a young person who otherwise may have been looked over for a lack of experience or skills.

Over the three months since we announced the Youth Contract we have consulted with businesses large and small to develop a system that works for them.

The Youth Contract, launched last November, aims to lift all young people out of unemployment. It will also support 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.

250,000 additional work experience places will be created through the Department for Work and Pension’s work experience and sector-based work academies programmes.

Extra support will be given 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.

Employers can register their interest in supporting the Youth Contract and can find out more via the DWP website at www.dwp.gov.uk/youth-contract/

Notes to Editors

  1. The drive to get all young people either earning or learning was launched in November by the Deputy Prime Minister and Employment Minister Chris Grayling. Today’s announcement is the next crucial step to getting employers ready to offer the first jobs from April.
  2. Businesses will be eligible for the wage subsidy if they employ a young person aged 16 to 24 who is participating in the Work programme.

Key measures of the Youth Contract include:

  • Cash payments to encourage employers to recruit young people.
  • An extra 250,000 Work Experience places over the next three years, taking the total to at least 100,000 a year.
  • At least 20,000 extra incentive payments worth £1,500 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.

For more information about the contract visit www.dwp.gov.uk/newsroom/press-releases/2011/nov-2011/dwp132-11.shtml

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