£1bn jobs fund to help young people into work

  • 11-29-2011

The government has announced a £1bn funding package to help unemployed young people, including graduates, find work. Deputy prime minister Nick Clegg said the aim was to get ‘young people into proper, lasting jobs in the private sector’.

Under the new Youth Contract, private sector employers who take on a young person aged between 18 to 24 from the government’s work programme will receive a subsidy worth up to £2,275. This will fund 160,000 work opportunities over the next three years, starting in 2012.

Unemployed young people will be eligible for these subsidised roles after they have been on jobseeker’s allowance for nine months. Employers who take on new recruits through the scheme will be expected to pay at least the minimum wage and the subsidy will more than cover the employer’s national insurance contributions for a year.

The funding package follows last month’s news that unemployment among 16 to 24-year-olds has risen to a record 1.2m, which fuelled concerns that a ‘lost generation’ of young people would be permanently scarred by their negative experience of the jobs market.

Some business leaders and organisations responded to the bad news on youth unemployment by calling for government support for employers who take on young people. The new funding package goes some way towards providing this.

John Cridland, director-general of the business lobbying organisation the CBI (Confederation of British Industry), commented, ‘We’re pleased that the government has developed our idea to incentivise businesses to take on the young unemployed. It will encourage firms to take a gamble on a young inexperienced person and help tackle the scourge of youth unemployment.’

The government also announced a range of other measures to help young job seekers:

  • Funding to support 250,000 places on the government’s work experience programme for 18 to 24-year-olds over the next three years, in addition to the 50,000 places already announced. This scheme allows unemployed young people to continue to claim jobseeker’s allowance while they are on a work experience placement for up to eight weeks. The work experience placement may be provided by the government’s Jobcentre Plus service. Alternatively, if you find your own work experience placement, Jobcentre Plus may be able to set it up formally through the scheme.
  • 20,000 additional incentive payments worth £1,500 each for employers to take on young people as apprentices, taking the total number of these payments available to 40,000 next year.
  • Measures to help 16 to 17-year-olds who are not in education, work or training.
  • Extra help and advice from Jobcentre Plus. Additional adviser support will be available to young people after they have been claiming jobseeker’s allowance for three months, and from five months they will have weekly, rather than fortnightly, signing-on meetings. They will also be offered an interview with the government-funded National Careers Service, which will provide careers advice to people of all ages and will be launched in full next spring.

So where is the money for the jobs fund coming from? Nick Clegg told the BBC Radio 4 Today programme that it would not come from ‘one particular saving’. There was some speculation that it might come from a freeze in tax credits.

Details of the government’s spending plans and initiatives to support economic growth will be revealed in tomorrow’s autumn statement from the chancellor, George Osborne. There is mounting evidence that the outlook for the UK economy is far from rosy.

Posted by Alison_TARGETjobs on 28 November 2011

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