Latest Public Sector News

23.07.13

Unemployment scheme helps just 4,700 young people into work

Only 4,700 young people have benefited from the youth contract since its implementation last year, new figures from the DWP show.

The opposition claimed the policy had “utterly failed” at improving youth unemployment.

The flagship policy was launched in April 2012 and was designed to help 160,000 18 to 24 year olds who have been out of work for more than six months. It is due to run for three years, but initial results from June 2012 – May 2013 are disappointing.

The contract offers businesses a subsidy of up to £2,275 per young person they employ. Ministers have said any money not claimed through the scheme would be reinvested into different measures to tackle youth unemployment.

Mark Hoban, the employment minister, said: “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.

“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.”

And Mike Cherry, national policy chairman for the Federation of Small Businesses, said: “[Our] research found that a wage subsidy is the single most important thing the government can do get small firms to take on more employees.”

But shadow work and pensions secretary, Liam Byrne, said: “The youth contract has utterly failed to get our young people back to work. This flagship scheme is on course to miss its target by more than 92% – no wonder there are still almost a million young people out of work.”

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