The scheme, launched last year as the Government’s flagship scheme to tackle record youth unemployment levels. Is designed to help 160,000 young unemployed people obtain jobs over three years, it offers employers up to £2,275 for taking on a young person who has been out of work for at least six months.
The figures released, which are the first official statistics on take-up of the Youth Contract scheme, show that it has only paid out for 4,690 young people into long-term work between June 2012 and May 2013, which is significantly behind the target of 53,000 a year.
Commenting on the scheme, Employment Minister, Mark Hoban, said:
“Although take-up of the incentive got off to a slow start, it is now on a clear upwards trajectory – and of those employers who have already made use of the scheme, 86% said they would be likely to take someone else who is eligible for the scheme on in the future.”
Mike Cherry, National Policy Chairman for the Federation of Small Businesses, added:
“Our research found that a wage subsidy is the single most important thing the Government can do, to get small firms to take on more employees.”
“Small businesses are committed to employing young people where possible and wage incentives can make a difference. More can always be done to make small businesses aware of the support that is available to them, and the FSB will play its part in doing so.”
Criticising the scheme in wake of the findings, Labour’s Shadow Work and Pensions Secretary, Liam Byrne, said:
“The youth contract has utterly failed to get our young people back to work. This flagship scheme is on course to miss its target by more than 92% – no wonder there are still almost a million young people out of work.”
“The welfare revolution we were promised has fallen apart. The work programme doesn’t work, universal credit is disappearing into the sunset, and now we know that the youth contract has been a disaster.”
On launching the scheme last year, the Government stated that it would review the progress of the measures on a regular basis. It has been revealed that Ministers will shortly announce how any money not yet claimed by businesses in wage incentives will be reinvested into other programmes aimed at helping young people into work.
Mr Hoban commented:
“We have vigorously promoted the wage incentive to employers, and the response has been increasingly positive.”
“But we’ve always been clear that we’d listen to employers and see how the policy is working. Any money which is not claimed in wage incentives will be reinvested in other programmes to help young people into work.”