Skip to main content

Youth unemployment and the Government’s Youth Contract

28 February 2012

The latest ONS unemployment statistics (October—December 2011) showed that there were 731,000 young people aged 16–24 years looking for work, excluding students. The unemployment figure including students was 1.04 million — up 22,000 on the 3 months to September 2011. The unemployment rate for 16–24 year olds, including students, is 22.2%.

In December 2011, the Government published a joint strategy for addressing the problem of the rising number of young people not in education, employment or training (NEETs). The strategy set out five priorities: raising educational attainment; enabling local partners to provide coordinated services to support young people; incentivising employers to recruit young people through apprenticeships and work experience; making work pay through the Universal Credit and support available through the Work Programme; and establishing a new Youth Contract

The Youth Contract will be launched in April 2012 and will make “almost £1 billion”, in addition to existing funding for employment services, available over three years to provide new opportunities for young people in employment, education and training, including:

  • 160,000 subsidised jobs. The Government will pay employers up to £2,275 for each 18–24 year old they take on from the Work Programme;
  • An extra 250,000 Work Experience places. All 18–24 year olds who want a work experience place will be offered one before they enter the Work Programme;
  • At least 20,000 extra incentive payments of £1,500 for employers that take on young people as apprentices;
  • Extra support for young people through Jobcentre Plus, including weekly rather than fortnightly signing-on, more time with JCP advisers and a National Careers Service interview; and
  • A new payment-by-results initiative focusing on 16–17 year old NEETs with no GCSEs at grades A–C. Organisations and businesses will be invited to bid for contracts worth a total of £126 million, in which payments of up to £2,200 will be offered for every participating NEET helped into education, an apprenticeship or work.

The Work and Pensions Committee’s inquiry will consider the Government’s approach and look at lessons learned from other approaches, such as the previous Government’s Future Jobs Fund. It will also seek to assess the relative merits of job subsidies, apprenticeships and work experience placements and how the Youth Contract will be coordinated between departments, local authorities, agencies and employment services providers.

Submissions of no more than 3,000 words are invited from interested organisations and individuals, addressing the following issues:

  • The reasons for young people’s comparative disadvantage in the labour market, including: Whether young people are obtaining the right skills at the right qualification level; whether young people’s skills match the requirements of the labour market and job vacancies; regional variations in youth unemployment; whether young people are receiving adequate careers and education advice; why employers appear to prefer to recruit older workers;
  • The design of the Youth Contract, including: the role of Jobcentre Plus (JCP) in identifying appropriate young people for referral and whether JCP has the capacity to offer extra support to young people; whether it is an adequate response to over 1 million NEETs; the adequacy of the level of job subsidy on offer; the proposed mix of job subsidies, apprenticeships and work experience and how they can be targeted to help those most at risk of long-term unemployment; whether wage subsidies will support part-time work; whether the approach can lead to sustainable, full-time, long-term jobs;
  • Lessons from the Future Jobs Job, including: how to encourage private sector involvement and adequate take-up amongst all types of employers; the implications for Youth Contract wage subsidies of EU state aid rules; how to maintain and encourage good local partnerships; avoiding "deadweight" (in which public money pays for outcomes that would have happened anyway);
  • How Youth Contract wage subsidies will operate within the Work Programme, including: how wage subsidies will be divided between Work Programme contract package areas and providers; the implications for Work Programme providers’ fees; and the cost-effectiveness of offering wage subsidies through the Work Programme; and
  • How the Youth Contract will be coordinated between Government departments, local authorities and agencies, including DWP, DfE, BIS, National Apprenticeship Service, Young People’s Learning Agency and Skills Funding Agency.

The deadline for written evidence is Friday 13 April 2012.

How to submit your evidence