Youth unemployment: CBI and CIPD call for government to cough up more cash

The CBI and the Chartered Institute of Personnel and Development (CIPD) have today urged the government to cough up more cash to tackle youth unemployment.

On Friday, Personnel Today revealed the CBI would lobby the government to divert the £1,000 subsidy given to employers who hire the long-term unemployed – for which it said take up was low – towards subsidising apprentices.

Today, the CBI announced its five-point plan to stem youth unemployment calling for this £1,000 unemployment subsidy to be added to the £1,500 Train to Gain funding for training which it said could create 50,000 new apprentices.

The business group also called for a new £25m fund to encourage employers to take on more apprentices than they need, and for employers to offer more work experience placements, internships and volunteering schemes to get young people into the workplace.

Richard Lambert, director-general of the CBI, said: “Young people are being hardest hit by unemployment, and the government must increase the opportunities available to limit its scarring effects.”

But HR professionals and think tanks warned the CBI’s plan to divert the £1,000 subsidy towards apprenticeships would not create any new vacancies.

Paul Speer, head of BT’s Apprenticeship Academy, said: “[The subsidy] wouldn’t encourage employers to take on more apprenticeships because it’s a relatively small amount of money, but it could enhance what we offer in terms of training.”

David Coates, associate director of think tank The Work Foundation, added: “I don’t think the CBI’s [£1.000 subsidy] proposal would make a difference; it wouldn’t create one new apprenticeship. The extra money would just be given to employers who would have taken apprentices on anyway.”

Meanwhile, the CIPD has called for a £1,250 work placement subsidy to be paid to employers who offer unemployed 16 to 17-year-olds six months work experience.

Gerwyn Davies, public policy advisor at the CIPD, said: “The work placement idea would give young people key employability skills even if a formal apprenticeship place is not available. Apprenticeships are often seen as the silver bullet, but our members’ feedback suggests that many employers are not in a position yet to offer apprenticeships.

“The work placement subsidy would therefore be a useful addition to the armoury of measures targeted as mounting youth joblessness and go some way towards helping pressured companies do their bit for what is becoming a national crisis.”

The recent Labour Market Outlook survey by the CIPD and KPMG revealed the number of 16 to 17-year-olds in employment had fallen by 18% in a year, compared with a 5% fall for 18 to 24-year-olds and a 2% fall for 25 to 34-year-olds.

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