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19.09.12

Youth Contract ‘not enough’ to tackle unemployment and skills crisis

The Government’s flagship work and training scheme, the Youth Contract, is insufficient on its own to tackle the scale of the unemployment crisis, an expert committee of MPs has concluded.

The Work and Pensions Committee said it is a “good start in attempting to tackle youth unemployment”, but flagged up a series of concerns with it, including problems with the eligibility criteria and maximum funding for the scheme for 16 and 17-year-old NEETs (young people not in employment, education or training).

It says that without careful monitoring, unpaid work experience may be “counter-productive”, and importantly, says that the current wage incentives “are unlikely to be sufficient to encourage employers to create jobs…they are likely to have a positive impact only at the margins”.

The current wage incentive rate, £2,275, may need to go up in areas with very high youth unemployment and to encourage recruitment of disabled people.

Committee chair Dame Anne Begg, Labour MP for Aberdeen South, said: “The wage incentive scheme may help to ‘level the playing field’ for young people competing for jobs in the mainstream labour market. But it provides no guarantee of a job placement for young long-term unemployed people. As currently designed, we are concerned that it will be less effective than some previous schemes in helping the young people who face the biggest barriers to finding a job. In particular, the Government may need to change the design of the Youth Contract to encourage employers to take on young disabled people and young black men.”

The committee called on the Government to implement the recommendations in the 2011 Wolf Report on vocational educational “as a matter of urgency” to stop the current situation where people ‘churn’ between educational courses and unemployment.

Youth employment and skills policy is split across at least five central government departments, the committee reports, creating complexity and confusion. This needs streamlining, Dame Anne said: “There is no shortage of youth employment services but they are poorly coordinated and neither employers nor young people know where to go to find quick and useful information. The Government needs to streamline delivery of employment, training and skills opportunities for young people. It should start by establishing and publicising a dedicated telephone helpline and online service where employers can go if they want to offer a job, work experience or training opportunity to a young person.”

Labour said the committee report showed the £1bn Youth Contract was “failing”, but DWP minister Mark Hoban said it is a “bold and ambitious” scheme that will help young people get into work.

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