Youth contract 'insufficient' to tackle youth unemployment, MPs say

The youth contract is expected to create an additional 430,000 work opportunities by 2015

The government's youth contract is not enough to tackle the scale of youth unemployment, a group of MPs has said.

The youth contract provides £1bn for a range of schemes aimed at getting young people into work.

The Work and Pensions Select Committee said the contract was "a good start" but alone would not be enough to tackle the high level of youth unemployment.

Ministers said thousands of young people had already benefited from the contract and many more would in future.

Labour said the report showed the government should "change course fast".

The government's youth contract brings together £1bn of funding for a number of schemes, up until 2015, to help get young people into work.

'Black hole'

Measures include providing 160,000 employers with a "wage incentive" of £2,275 to take on an unemployed 18-24 year-olds, 250,000 work experience placements and additional support from Jobcentre Plus.

If all targets are met, the contract is expected to create an additional 430,000 work opportunities over the next three years.

Dame Anne Begg, chair of the committee, said she welcomed the contract, particularly the increased support from Jobcentre Plus advisers and the widening of work experience opportunities.

The committee also praised the creation of a scheme targeted at 16 and 17 year-olds who are not in education, employment or training - the majority of whom do not receive support from Jobcentre Plus because they are not eligible to claim Jobseekers Allowance.

Dame Anne told BBC Radio 4's The World at One the number of people the government was expecting to help through the contract was "very, very ambitious".

She said: "There's no doubt that the government is making real attempts to get young people into work and they've realised the importance of young people getting work as soon as possible.

"The part of the scheme that concentrates on 16 to 18 year olds is very welcome, because that's the group that very often are completely ignored. They fall into a black hole after they leave school.

"The difficulties are perhaps the volumes that they're expecting. It is very difficult to identify some of the people that might be helped on this."

'Wake-up call'

The committee said the government needed to widen its criteria for the scheme for 16 and 17 year-olds - which is currently only open to those with no GCSEs.

Dame Anne said: "There are lots of youngsters who might have one or two (GCSEs) but still have major barriers to work."

On wage incentives, the committee said their impact would be "only at the margins" and the government should keep under review the amount it pays employers.

More money may be needed in areas where youth unemployment is particularly high and to encourage the recruitment of disabled people and ethnic minorities.

The committee called for the government to simplify access for employers to the numerous schemes by setting up a dedicated telephone helpline for those who want to offer a job, training or work experience to young people.

Stephen Lloyd, a Lib Dem member of the committee, said: "The committee realises the youth contract is a serious attempt to deal with the current issues surrounding youth unemployment.

"During the committee's investigations we have highlighted some areas where improvements could be made and I am confident the coalition government will take our recommendations on board."

A Department for Work and Pensions spokesman said: "Thousands of young people have already benefited from measures in the Youth Contract and over the next three years the package will give hundreds of thousands more the chance to earn or learn.

"But we know the Youth Contract alone won't tackle youth unemployment. That's why the government is working tirelessly to create the conditions for businesses to grow and create more jobs, we're reforming the education system to make sure pupils are equipped to take up new jobs and we also need employers to take up the help we are offering and give young people a chance."

Labour's shadow work and pensions secretary Liam Byrne said the report showed the government's plan for youth jobs "is failing and we need to change course fast".

He added: "This is now a very loud wake-up call, at a time when the country is in a double-dip recession made in Downing Street."

Ronan Dunne, chief executive of O2, said: "Today's report shows that the youth contract hasn't yet had the impact needed to tackle the level of UK youth unemployment.

"I believe that it's not only the businesses that have signed up to the youth contract who can act to help the one million unemployed young people, rather all businesses, big and small, have a role to play in supporting young people on their journey to work.

"This can be anything from offering quality work experience and apprenticeships through to mentoring."