Youth Contract Scheme Launched
Business groups have welcomed the launch of the Government’s Youth Contract, which includes an initiative offering small firms £2,275 to take on young workers.
The Youth Contract scheme encourages businesses to take on staff under 25 with wage incentives worth over £2,000 through their first year. Subsidised by the Department for Work and Pensions, the sum given to firms for each young person is more than enough to cover the employer’s National Insurance Contributions for a year.
The £126-million Youth Contract programme is aimed at helping unemployed 16- to 17-year-olds get and stay in jobs. Nearly half-a-million new opportunities for 18- to 24-year-olds are on offer, including apprenticeships and work experience placements.
Various types of cash support are available for small firms who take on a young worker. Employers that recruit an 18- to 24-year-old will get up to £2,275 each, while those small firms who take on an apprentice can apply for one of 20,000 extra Apprenticeship Grants for Employers (making 40,000 total grants). Some wage incentives may be made in advance if smaller firms require help with initial start-up costs and managing their cashflow.
To further combat high youth unemployment, an extra 250,000 work experience places will also be provided over the next three years. With a total cost of £1 billion, the initiative aims to assist 55,000 ‘Neets’ — young people not in education, employment or training — which make up one in five 16- to 24-year-olds.
Minister of State for Further Education, Skills and Lifelong Learning John Hayes said:
“In the past, smaller firms have been deterred from hiring an apprentice due to perceived logistical, training and administrative costs, but the new incentives are encouraging SMEs to give thousands of young people a great start to their working life.”
A spokesman for the Forum of Private Business said:
“Subsidising the cost of employment makes recruitment more cost-effective. We hope the quality of young people taken on will persuade businesses to employ many more in the future as we hope to begin to see a private-sector led recovery.”
For further information see the PDF How you can support the Youth Contract and get Britain’s young people into work