Youth contract - a billion pound flop?

Laura Kuenssberg

Former Business Editor

Nick Clegg meets young people after announcing a £126 million scheme to get 16 and 17-year-olds back into employment or education. Credit: Sean Dempsey/PA Wire

Last year the government launched the scheme where employers are given more than £2,000 to entice them to take on a young person. They receive the cash after giving someone work for six months.

Back in September we reported that the early take up of the scheme was pretty poor.

Nearly a year later new research suggests that the number of employers taking part has been even more disappointing.

The REC, the employers' organisation, found that out of 200 firms, not a single one had taken anyone on under the scheme.

Only 18% of those asked say they plan to use it - that is actually a fall on this time last year.

Kevin Green, the head of the REC, warns that if nothing changes about the way the scheme is delivered it simply won't have an impact on the stubborn problem of youth unemployment.

Business often complains there are far too many government schemes to help get people into work, they're often very poorly publicised and also too complicated. The disappointing take-up of the Youth Contract seems to bear that out.

The government has said they will publish their statistics on take up next month.

Here are the results of the REC's survey:

  • Yes, we have used the Youth Contract to hire at least one young person:

July 2012 n/a

May 2013 0%

  • Yes, we are aware of the Youth Contract and will use it:

July 2012 22%

May 2013 18%

  • Yes, we are aware but will NOT use it:

July 2012 36%

May 2013 46%

A Government spokesperson said: "The Youth Contract is making a real difference to unemployed young people.

“By hugely increasing the number of work experience and apprenticeship opportunities we are giving young people the valuable workplace skills they need, and by offering employers wage incentives worth up to £2,275 we are helping businesses to take them on.”

“It’s simply not correct to suggest the wage incentive is only available through the Work Programme – it is also available through Jobcentre Plus for any young person on benefits. We have also run a marketing campaign to encourage employers to take up the offer."