Deputy Prime Minister Nick Clegg has revealed a £1bn plan to provide subsidised work and training placements to "provide hope" to thousands of young people and try and help prevent another lost generation of young jobless people.

The Youth Contract Scheme, launched today, will give employers subsidies worth £2,275 to take on 160,000 18-to 24-year-olds, for six months, over three years.

Youth unemployment hit 1.02 million in the three months to September.

The new programme begins next April and aims to get young people into a range of employment sectors - from retail and construction to the green economy.

Up to 400,000 work and training placements will be created in England, Wales and Scotland by giving employers wage incentives equivalent to half of the youth national minimum wage.

Other proposals include:

Another 250,000 young people will be offered 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.

A £50m programme for the 25,000 most disadvantaged 16-and 17-year-olds in England - those not in employment, education or training - to get them onto an apprenticeship or into work.

At least 20,000 additional incentive payments for firms in England to create apprenticeships for 16- to 24-year-olds

More support for young people at job centres, such as extra time with advisers and a careers interview.

The government said the £1bn made available is new money - not a reallocation of existing funds - and that certain expectations will be placed on those taking part.

The plan would provide a "step-change" in assistance for young people and were part of the government's commitment to ensure the next generation did not "pay the price" of economic troubles not of their making.

Clegg said: "The aim of the youth contract is to get every unemployed young person working or learning again before long-term damage is done. Youth unemployment is an economic waste and a slow-burn social disaster.

"If people are out of work when they're young, they bear the scars for decades. If they have a false start, they might not ever fully catch up. These are tomorrow's mothers, fathers and taxpayers. If they end up falling behind, our whole society pays the price."

NCVO: Major strides, but must involve the sector more
The National Council for Voluntary Organisations (NCVO) responded positively to launch of the Youth Contract scheme, with some qualifications.

Sir Stuart Etherington, chief executive of NCVO, said: "This move will hopefully make major strides into getting more young people into work. We know from our wide member base of youth organisations how important work is in the lives of young people, and how demoralising they feel when they are thwarted at the first hurdle to employment.

"The voluntary sector has a pivotal role to play in helping to tackle youth unemployment; charities run many programmes that enable people to find work, develop their skills and confidence, and help them to become job ready.

"However, the Government must ensure it doesn't miss a trick by not involving the sector more in designing and delivering these initiatives.

"The Youth Contract programme must be structured in a way which enables voluntary and community organisations to play a full role, and we are in urgent discussions with DWP to ensure this is the case. NCVO has also raised concerns that the Work Programme in its current form risks squeezing out voluntary sector providers, and we will continue to keep a close eye on how this and other initiatives are operating."

Foyer Federation: ‘deal’ has to be right
The Foyer Federation, a national charity which helps to transform opportunities for young people, welcomed the investment in young people made by the Youth Contract, but stresses that the ‘deal’ has to be right.

Jane Slowey, chief executive of the Foyer Federation, said: “The Foyer Federation’s Deal to open talent is a successful contract for youth that invests in young people and expects them to invest in themselves. Its success lies in it being a genuinely two way street and it gives 10,000 young people a year a stake in society. If the Contract for Youth does the same for the young people currently struggling to get a foothold in the labour market then it will be a success.”

Slowey added that it is crucial that the guidance, work placements, and jobs offered under the Youth Contract are of high quality, and enable positive and sustainable transition into the workplace.

"The government risks alienating young people if the contract is exploitative, unconstructive or is seen to be so. It must be a genuine 'something for something' deal," she said.

TUC: Welcomes elements of the plans, but not work experience scheme
The TUC general secretary, Brendan Barber, added: "It may be late, but the TUC welcomes elements of the plans being announced – the job subsidy, training and extra help from jobcentres effectively recreate the most positive elements of the last government's new deal for young people, which the TUC strongly supported.

"But the massive expansion of the work experience scheme is much less positive, unfortunately. There are already widespread reports of young people on the programme being exploited. Keen unemployed youngsters desperate to find work shouldn't be conscripted into edging out other workers who should have been paid the going rate for the job."

Unite: Short-term plan to get youth working
Unite, the UK’s largest union, criticised Nick Clegg’s plans. Unite assistant general secretary, Tony Burke, said: “This ‘idea’ is nothing more than a short-term exercise that will do very little to address the real problem that is blighting this country. Youth unemployment is currently at a record high and this initiative will do little more than massage these figures.

“It will create a merry-go-round of young people going into low-paid jobs, with no guaranteed future. Unite believes we need a proper system for companies to take on young people as skilled apprentices to alleviate skills shortages in the future, not cheap labour for private companies.

“‘The Youth Contract’ is nothing more than a re-heating of the YTS and YOP schemes and is a hark back to the eighties where similar Thatcherite ideas failed.

“This will not tackle the youth unemployment dilemma; it is simply cosmetic arrangement sticking plaster on an open wound.”

Labour: 'beggars belief'
The Labour Party questioned how it would be funded, following reports that working tax credits were to be squeezed.

Shadow work and pensions secretary Liam Byrne said: "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.’

Byrne said Labour’s tax on bankers’ bonuses would create 100,000 new jobs.

Share Story: