NIACE welcomes Government’s Youth Contract

25th November 2011

The announcement by Deputy Prime Minister Nick Clegg (on Friday 25 November) of the Youth Contract – which will offer 400,000 young people aged 16 – 24 subsidised employment, work experience or apprenticeship opportunities – is broadly welcomed by NIACE.

Rob Gray, NIACE Senior Project Officer, said:

“The £1 billion cost of the 3 year initiative is large in comparison to previous schemes to tackle youth unemployment, but the estimated 1.16 million 16 – 24 year olds currently not in employment education or training, demands this scale of response.”

“The initiative, described by Nick Clegg as ensuring “that those born in the boom do not bear the brunt of the bust”, has the potential to make a positive difference to a large number of young people. In particular, the £2,275 subsidy payable to employers to employ a young person for 6 months will give 160,000 young people a crucial first step into the labour market. The unpaid work experience placements of just 8 weeks in duration, in which the majority of young people (250,000) will participate, are welcome but cannot be viewed as anything like as substantive. The £50m programme to help 25,000 of the most disadvantaged 16 and 17 year olds into an apprenticeship or into work and 20,000 additional incentive payments for firms offering apprenticeships to 16 – 24 year olds will go some way to ensuring that some of the most disadvantaged young people are given opportunities.”

Although 400,000 young people in total will take part, this still leaves no Youth Contract for approximately 500,000 young people not in employment, education or training (NEET). Currently there does not seem to be anything in place to stop employers from choosing the most qualified and work-ready young people to participate, which could result in the majority of those who do not participate also being the ones who most need help.

Whilst broadly welcoming the Youth Contract, a major issue for NIACE is that any intervention to support young people, will need to give them the opportunity to gain skills that help to protect against a return to unemployment, and avoid the ‘low pay, no pay cycle’ that was experienced by a number of people who never got a foothold in the labour market following previous recessions. NIACE would therefore like to see skills provision built into, or linked to, every initiative to support entry into the labour market.

Rob Gray, ended:

“Ultimately the UK, like many developed economies, needs to find an effective long-term solution to supporting entry for young people into the labour market. In the UK, all the major political parties have begun to see apprenticeships as the answer to this. But although the Coalition announced a massive increase in the number of apprenticeship places available last year, with the intention that these would be taken up primarily by unemployed young people, out of the 126,000 new apprenticeships places created 89,000 were taken by employed people over 25. This shows that more work needs to be done to understand why employers are consistently reluctant to recruit young people so that we can identify the carrot or stick that will finally get them to do so in good times and bad.”