Youth contract 'to be ended early'

PROGRAMME SHOCK: Deputy Prime Minister Nick Clegg's Youth Contract is being wound up early. Mr Clegg is pictured during a previous visit to the region, which included a tour of car parts maker Nifco's Eaglescliffe factory

PROGRAMME SHOCK: Deputy Prime Minister Nick Clegg's Youth Contract is being wound up early. Mr Clegg is pictured during a previous visit to the region, which included a tour of car parts maker Nifco's Eaglescliffe factory

First published in Business News
Last updated

A £1BN Government flagship scheme to get young people back into work is being wound up early after failing to help more than a fraction of those it targeted.

Businesses have been told a deadline for applications for wage incentives under the Youth Contract initiative has been brought forward to August.

Officials said falling youth unemployment meant the cash could be better targeted towards those struggling most to find work, including black and ethnic minority teenagers.

Labour said the scheme has been an "abject failure".

At its launch in 2012, deputy prime minister Nick Clegg said enough money was available to allow 160,000 under-25s to be given a six-month job start by firms taking advantage of a £2,275 state subsidy.

But recent statistics showed by November last year, wage-incentive payments had been made in respect of only just over 10,000 individuals.

A Government spokeswoman said: "We now have record employment in this country, with the largest fall in youth unemployment since the 1980s.

"The Youth Contract has contributed to that by providing over 200,000 opportunities for young people, helping them to get the experience and training they need.

"As part of the Government's long-term economic plan, we'll be re-investing the wage incentive money in other projects targeted at those young people who face the biggest challenges to getting into work, so everyone can share in the growing economy and improving jobs market."

However, Rachel Reeves, shadow work and pensions secretary said: "The Youth Contract has been an abject failure from start to finish.

"Ministers promised it would get every unemployed young person working or learning, but only a tiny fraction of Youth Contract employer wage incentives were ever used to get young people into work, and over 800,000 young people are still unemployed."

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