Youth Contract

Friday 25th November 2011 Written Statements

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I am pleased to announce today the details of a new Youth Contract, which includes a range of additional help for unemployed young people, building on the support already available through Jobcentre Plus and the Work programme.

This will include more intensive support for all 18 to 24-year-olds including additional adviser time and weekly signing requirements, extra work experience and sector-based work academy places, and a new wage incentive scheme delivered through the Work programme.

We are also making extra funding available for the Department for Education to support the most vulnerable NEET 16 and 17-year-olds into learning, an apprenticeship or job with training.

The package of support follows extensive discussion with businesses about the practical help Government can provide to make it easier for them to take on fresh talent. The new support is worth nearly a £1 billion over the next three years.

The Government’s offer to young people who are unemployed is based on a clear strategy for supporting young people into work whether they need short-term or more intensive long-term support, and ensuring that work pays.

This is supported by work experience, apprenticeships, sector-based work academies, the Jobcentre Plus Flexible Support Fund and an increasingly robust conditionality and sanctions regime. Young people who need more intensive support or who become long-term unemployed are referred to the Work programme.

The support we already have in place is helping many young people into employment, indeed our existing programmes will support 350,000 young people over the next two years. However, we recognise that the current economic situation means that some young people are still finding that getting work is not easy. This new support is designed to ensure that they are not left behind.

We know that different young people need different types of support, so this package includes a range of measures to ensure that every 18 to 24-year-old who finds themselves unemployed has the right support, at the right time, to help find a job and move into employment.

The Youth Contract brings together our existing support and also announces new measures, which include:

A total of 160,000 wage incentives to make it easier for employers to take on young people aged 18 to 24. A wage incentive will be worth £2,275, available as part of the Work programme. This will be more than enough to cover the cost of an employer’s National Insurance contributions for employing a young person for a year, and exceeds the recommendations by the CBI in their recent report on youth unemployment.

An offer of a work experience place for every unemployed 18 to 24-year-old who wants one, before they enter the Work programme. We are providing an additional 250,000 places.

Extra support through Jobcentre Plus in the form of weekly, rather than fortnightly, signing-on meetings; more time to talk to an adviser and a careers interview with the National Careers Service.

At least 20,000 extra incentive payments worth £1,500 each for employers to take on young people as apprentices.

A new £150 million programme for the most vulnerable NEET 16 and 17-year-olds to get them learning, on an apprenticeship or in a job with training.

The measures differ from previous schemes over the last decade, as they are focused on equipping young people with the experience and opportunities to gain long-term sustainable employment.

We are providing more support and more opportunities for young people but we also expect more in return. The signing regime will be more demanding of them than the current one. And those that drop out of a work experience place or a subsidised (or other) job without good reason will lose their benefits.

The Department for Work and Pensions components of the Youth Contract are Great Britain-wide, with Barnett consequentials for Northern Ireland. Apprenticeships and the Education Department component for 16 and 17-year-olds are England only with Barnett consequentials included in the package for Scotland, Wales and Northern Ireland.