25 Nov 2011

£1bn youth job scheme to tackle ‘social disaster’

Deputy Prime Minister Nick Clegg outlines his flagship £1bn youth jobs programme. But will it work and is it any different to previous schemes? Channel 4 News FactCheck investigates.

Under the Liberal Democrat leader’s “youth contract” plan, employers will be given “wage incentives” worth £2,275 to take on some 160,000 18-to-24-year-olds.

The roles will be available to young adults who are deemed most in need of help after three months, and will be given to all of those who have been on Jobseeker’s Allowance for nine months.

Another 250,000 young people will have the opportunity to undertake work experience placements lasting up to eight weeks. These will be available to every unemployed 18-to-24-year-old who wants one and has been seeking work for three months or more.

Is FactCheck having a déjà vu?
Youth unemployment sailed past the million mark last week, and within days Nick Clegg has a billion pounds and a plan.

The same thing happened in April 2009: youth unemployment hit an all-time high, and Labour rushed out the future jobs fund, pledging a £1bn. Splashing out £6,500 of taxpayer's money on every job, Labour's plan was axed by the coalition in March for being too expensive.

But this time it's different, says Mr Clegg – this time taxpayers will get value for money and the jobs will last longer. Is he right or is FactCheck having a déjà vu?

Read more from FactCheck: Clegg's youth contract vs Labour's future jobs fund

Extra funding for apprenticeships and a £50m programme to help 16 and 17-year-olds who are not in education or employment (NEETs) will also be on offer, the government said.

Launching the initiative at a college in Leeds today, Mr Clegg described youth unemployment as a “slow-burn social disaster” and said the country could not leave its young people on the “scrap heap”.

However he refused to be drawn on reports that, in order to pay for the scheme, Chancellor George Osborne was set to squeeze working family tax credits when he delivers his autumn statement on Tuesday next week.

He told the BBC: “This £1 billion isn’t paid for by one particular tax or one particular welfare change. That isn’t how it works.”

The Tories killed the future jobs fund and young people have paid a brutal price for this. Liam Byrne

Prime Minister David Cameron‘s official spokesman also declined to comment, saying: “All I can tell you is that we have prioritised new funds for this.”

For Labour, shadow work and pensions secretary Liam Byrne said it was the “squeezed middle families” who would be hit under the government’s proposals.

“The Tories killed the future jobs fund and young people have paid a brutal price for this, with youth unemployment hitting a million and long-term youth unemployment up 83 per cent this year,” he said.

“And if the Government is slashing working families tax credits to pay the bill for this new scheme, it beggars belief. That tells you everything you need to know about how out of touch the government is with the needs of our young people and squeezed middle families across Britain.”

The announcement comes the day after official figures revealed that a record 1,163,000 16-to-24-year-olds were NEET in the third quarter of this year.

A week before those figures, youth unemployment hit a record high in the three months to September, rising to just over a million.