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25.07.14

Coalition’s youth unemployment programme to end early

The coalition government’s programme to tackle youth unemployment across the country is to be wound up a month ahead of schedule, following claims that it has failed to meet its aims.

Championed by deputy prime minister Nick Clegg, the £1bn you contract incentive scheme was launched in 2012 with employers being offered a £2,275 government subsidy to allow 160,000 under 25s to be given a six-month "job start".

However, the Financial Times has reported that the DWP has written to companies to warn that no claims will be accepted for any placements that start after August 6 this year – a month earlier than planned.

Recent statistics show that by November last year wage-incentive payments had been made in respect of only just over 10,000 individuals. However, the government said the low take-up was a symptom of continued falls in youth unemployment – with the latest figures showing it went down by 141,000 in the last year.

A government spokeswoman said: “We now have record employment in this country, with the largest fall in youth unemployment since the 1980s.

“The Youth Contract has contributed to that by providing over 200,000 opportunities for young people, helping them to get the experience and training they need.

“As part of the government's long-term economic plan, we'll be re-investing the wage incentive money in other projects targeted at those young people who face the biggest challenges to getting into work, so everyone can share in the growing economy and improving jobs market.”

However, Labour’s shadow DWP secretary, Rachel Reeves MP, stated that the Youth Contract has been an abject failure from start to finish.

She added that ministers promised it would get every unemployed young person working or learning, but only a tiny fraction of Youth Contract employer wage incentives were ever used to get young people into work, and over 800,000 young people are still unemployed.

(Image: c. Liberal Democrats)

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