The government’s flagship scheme to cut youth unemployment will simply not be enough to tackle the current scale of the problem, according to a group of MPs.
Although the Work and Pensions Select Committee said that the £1 billion ‘Youth Contract’ was a good start, measures such as providing subsidised work and training placements and paying employers incentives to take on apprentices would not be sufficient in and of themselves.
The aim of the programme is to reduce employment among 16 to 24 year olds by 160,000 over the next three years.
Dame Anne Begg, chair of the Select Committee, said that the Youth Contract, although welcome, “will not be enough”.
“Young people need effective support from government to counteract the disadvantage they have long suffered in the labour market, but they also need a return to economic growth and a substantial increase in the number of new jobs,” she explained.
While some Youth Contract measures had been effective, they would only make a significant impact if all existing targets were met. “Our concern is that there is a real risk that the government will fall short of its more eye-catching targets,” Begg said.
For example, there were question marks over whether wage incentives would provide employers with enough encouragement to create new jobs. Instead they were likely to have a “positive impact only at the margins”.
But Katje Hall, chief policy director at employers’ lobby group the CBI, also pointed out that in England alone, there were currently 47 Youth Contract initiatives. “Firms tell us the sheer complexity of the system is off-putting. Rather than new initiatives, what businesses need is a streamlined system that is easy to access,” she said.
A survey among 800 employers conducted by the Chartered Institute of Personnel and Development likewise revealed that, while 71% believed that they had a role to play in tackling youth unemployment, a quarter had not hired anyone aged 16 to 24 in the last 12 months.
Moreover, only 56% planned to do so over the coming year, often due to negative perceptions of young people, which discouraged them from investment. Nonetheless, if employers gave them a chance, a huge nine out of 10 said that they were either ‘very satisfied’ (26%) or ‘fairly satisfied’ with their new recruits.
