The government’s new £1bn “life-changing” youth unemployment scheme risks doing little for young people not forced to search for work, a leading think tank has warned.
The Institute for Fiscal Studies said that there are more than 300,000 who currently claim universal credit but are not required to look for a job, mostly due to health conditions.
The measures were announced with great fanfare on Monday, with work and pensions secretary Pat McFadden saying they would “give life-changing opportunities to” the nearly one million not in employment, education or training (NEETs).
The initiative includes a new Youth Jobs Grant, offering businesses £3,000 for each 18-24 year old hired who has been unemployed for six months or more.
A new apprenticeship incentive will provide small and medium-sized businesses with £2,000 for every new 16-24 year old employee. The existing jobs guarantee, which offers a six-month role to Universal Credit claimants who are unemployed for 18 months, will also expand to include those up to 24 years old.
Xiaowei Xu, a senior research economist at the IFS who has written a paper on the plans, said one of the measures, a £3,000 grant, would be open to young people on Universal Credit who are not required to search for work.
In practice, however, she added: “Young people exempted from work search requirements are extremely unlikely to find work. This group has increased substantially in the last few years. Stemming its rise will be important for making progress on youth employment.”
When it comes to wage subsidies, the report warns that “the number of placements will be constrained by employer take-up, and – at least in the case of the Jobs Guarantee – by the administrative capacity of the Department for Work and Pensions (DWP) and the local “delivery organisations tasked with matching jobseekers to employers”.
It adds: “The government expects the Jobs Guarantee to support an average of 30,000 people a year over the next three years, a fraction of the 72,000 UC claimants who are eligible for the policy today. The Youth Jobs Grant is expected to support an average of 20,000 people a year over three years, taking the yearly average number supported by wage subsidies to 50,000.
“For context, even if all 50,000 jobs were ‘additional’ jobs that would not have existed in the absence of these policies, this would take the NEET rate from 12.8 per cent to 12.1 per cent, still well above the 11.7 per cent seen three years ago.”
A DWP spokesperson said: “Yesterday’s major intervention will help to create 200,000 jobs and apprenticeships for young people, backed by almost £1 billion.
“This is part of a broader support package, totalling £2.5 billion, which will support almost one million young people to earn, learn or do valuable work experience. For those young people being held back by health conditions, we are also investing £3.5 billion in personalised support to help those who are able back into the workplace.”
Correction: An earlier version of this copy said that that the government's new youth unemployment scheme does not target over 300,000 young people on Universal Credit. However, the scheme does in fact include this group. The article has been updated to reflect this.
Young people are not snowflakes and shirkers, minister insists
UK government to launch £1bn plan to tackle youth unemployment
Surge in young people jobless due to growing health crisis
Curtice says ‘no doubt’ Reform’s support is falling as Farage renews attack on YouGov
Information Commissioner urged to investigate Reform’s energy bills competition
Reeves tells AI entrepreneurs to ‘come to the UK’ as she unveils new institute
