Press release

Cities youth employment boost

Nick Clegg announces a new boost for the government’s flagship programme, the Youth Contract, to get young people into jobs that last.

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


Youth unemployment is a major issue for cities, which is why we are working with the core cities to tackle the issue at a local level. England’s 8 largest cities will now be able to bid for a share of £50 million to help young people into work through the Youth Contract.

Under the Wage Incentive scheme, for every long-term unemployed young person a business takes on, they can claim a £2,275 Wage Incentive payment to help meet the costs of taking on a young person and training them up. The cities will be able to design their own schemes to target local young employed people and help them into local businesses.

The 8 core cities all committed to help young people into work when they signed their City Deals. The Wage Incentive and money for new local policies will provide a welcome boost to help them achieve that. Leeds agreed a ‘Guarantee for the Young’ with innovative new ways to give every young person access to a job, training, apprenticeship, volunteering or work experience; Manchester set up an ‘Apprenticeship Hub’ to boost apprenticeship numbers by supporting small and medium sized businesses and Sheffield took control of its skills budget.

Deputy Prime Minister Nick Clegg said:

Youth unemployment has been a problem for a long time in this country, which is why I started the Youth Contract. We clearly have more work to do, but I am not going to turn my back on the young unemployed just because this is proving to be difficult.

The Wage Incentive is a key part of the Youth Contract to help young people into work and enable businesses to take on staff so that they can grow.

Local leaders are best placed to work with businesses and promote local initiatives to help young people get jobs. The Wage Incentive is demand driven – businesses are paid £2,275 when they take on an unemployed young person. Firms such as Forest Sofa Ltd, which I’m visiting today, prove that if young people are given a chance they are good for business and good for growth, whether that’s through apprenticeships, traineeships or the Wage Incentive.

Take up of the Wage Incentive has significantly increased since January, and now more than 4,000 young people a month are starting work under the scheme. When taken together with the increases in apprentices and work experience placements, the Youth Contract is making a real difference to getting young people into work and kick-starting the economy.

There are more people in work today than ever before. Since 2010 the government has helped to create over 1.3 million jobs in the private sector.

Cities Minister Greg Clark said:

As Minister for Cities I am delighted that the government is offering the 8 core cities the opportunity to come forward with innovative proposals to tackle youth unemployment. As this is going to be a genuinely competitive process, there is a real incentive for cities to be groundbreaking in their approach and to make a positive difference to the career opportunities of young people in their areas.

Recent research by the Federation of Small Business found that a wage incentive is the single most important thing the government can do to get small firms to take on more employees. There are currently over 4,000 job commitments being made each month through the Wage Incentive – showing the clear backing of employers.

The Deputy Prime Minister will make the announcement during a visit to Forest Sofa Ltd in Salford, a company that has benefited from the Wage Incentive. They took on a member of staff who is now playing a major part in helping them expand their business.

Managing Director of Forest Sofa Ltd, Dave Foster, said:

At Forest Sofa we’re proud to give young people a chance, whether it is an apprenticeship within our contract sales depart at Forest Contract Ltd, as a sales and marketing apprentice helping expand our online brand The English Sofa Company, or through our latest recruit Anthony, who we’ve taken on through the Wage Incentive.

Anthony has proved a real bonus for the business and will be key to making our newest venture – The English Bed Company – a resounding success. My message to any business thinking of taking on a young person, whether through apprenticeships or the Wage Incentive, is that the only thing you’ll ask yourself afterwards is why you didn’t do it sooner.

The government is committed to making long-term investments in young people’s futures through work experience, apprenticeships and helping companies to recruit by guaranteeing their investment with a wage incentive.

Over half a million people started an apprenticeship last year – more than ever before. Overall, this government will deliver at least 250,000 more apprenticeships over the spending review period than the previous government had planned. The government has listened to employers and is making apprenticeships better – so employers help design the courses instead of having to pick one “off the shelf.” Last year there were 100,000 work experience placements, which are proven to get young people off benefits and into work.

The Wage Incentive is one part of the government’s plan to create more jobs now and support business growth. It is in addition to the work going on to devolve more powers to city regions and in addition to investment in infrastructure projects – locally, regionally and nationally – to improve roads and rail services, build homes and boost our internet access. And over the next 10 years the Regional Growth Fund will have invested £2.6 billion, leading to £14.7 billion of private sector investment and 550,000 jobs.

Notes to editors

The 8 core cities were the first cities to agree City Deals. They are Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield.

The Wage Incentive is £2,275 paid to employers when they take on an unemployed young person. Payments are only made where it has played a clear role in recruitment practices, and in most cases the employer isn’t paid until the young person has been in work for 26 weeks.

The bidding process will be a short competition run over the summer and cities will be judged on a number of criteria including strategic fit with national and local priorities, value for money and match funding with some local resources.

Published 30 July 2013