Amid the general gloom of Chancellor George Osborne’s Autumn Statement was a chink of light for Britain’s expanding army of young unemployed, with the announcement of a new “Youth Contract” initiative.
The scheme will give employers subsidies of £2,275 – half of the youth national minimum wage – for every apprentice aged between 16 and 24 that they take on for six months. Funds are available for 160,000 places: welcome news for the jobless, following the announcement that youth unemployment had hit the one-million mark in the three months up to September; and for managers, who may have been reluctant to take on new staff under present economic conditions.
At least 40,000 of those places will be attached to incentive payments designed to encourage small businesses to take on apprentices. An additional 250,000 work experience placements will be offered to any interested candidates who have spent three months or more seeking work, creating a potential total catchment of 410,000.
Nick Clegg has stated that this scheme differs from the previous government’s Future Jobs Fund in focusing on the private sector, with the potential to create “proper, lasting” positions, rather than, as he sees it, the “here today, gone tomorrow” public sector jobs of the former regime.
In many ways, the scheme bears an uncanny resemblance to Labour’s New Deal initiative, which was widely praised for its impact on youth unemployment.
KPMG’s Malcolm Edge has given the scheme a warm welcome, commenting: “For too long, employers have bemoaned the lack of ‘work-ready’ school leavers wanting to enter the marketplace. With the advent of the new ‘Youth Contract’ they have a genuine opportunity to find the right people for the right jobs in the right regions and shape the future UK workforce.”
However, Brendan Barber of the TUC has urged caution, suggesting that employers may use the scheme as a source of cheap, high-turnover labour. “Keen unemployed youngsters desperate to find work shouldn’t be conscripted into edging out other workers who should have been paid the going rate for the job,” he said.
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For our full interview with Brendan Barber, click here