The £1,000 incentive available to employers to recruit the long-term unemployed should be stopped in its tracks and given to firms hiring young apprentices, the CBI will demand.
Katja Hall, director of employment policy at the CBI, told Personnel Today the business group was about to lobby government ministers to ask them to redirect the funding from the long-term unemployed to youth unemployment. Hall said the recruitment subsidy – part of a £500m package made available over the next two years – was not being used, and should go towards combatting the 928,000 16 to 24-year-olds now out of work.
Hall said: “The CBI is particularly concerned about rising youth unemployment. We question the £1,000 subsidy which goes to the long-term unemployed, for which take-up is pretty low, and we think it could be better spent if it was focused on apprenticeships.
“Employers will [then] have a powerful incentive to take on apprentices and ensure young people develop skills that are valued by business.”
But with long-term unemployment among over-25s as a whole outstripping long-term unemployment among 18 to 24-year-olds by more than 7:1, HR directors and think-tanks warned the government should not just prioritise the needs of the young.
Becci Newton, senior research fellow at the Institute of Employment Studies, said: “Young people do need opportunities but not at the expense of older people. There needs to be parity and support for both groups.”
She added about a third of the young unemployed already had level 3 qualifications or higher, so new apprenticeships would not necessarily help them into employment.
Jan Marshall, HR director at Marriott Hotels – which recently hired seven long-term unemployed people for a hotel in Twickenham – agreed it was “not fair to prioritise the young”, but the CBI was right that the money could be used more effectively.
“I don’t think many employers are aware of the [long-term unemployed] recruitment subsidy,” she said. “If they are to have an incentive it should be more accessible and achievable.”
However, Paul Speer, head of BT’s Apprenticeship Academy, warned the extra £1,000 would be unlikely to encourage extra apprenticeship places, but could enable better quality training.
A spokeswoman for the Department for Work and Pensions could not say whether the government would accept the CBI’s proposal, but said: “We keep the performance and value for money of all our employment measures under constant review to ensure we maximise the help available to those out of work within the available funding.”
Opinion: David Coates
“I don’t think the CBI’s proposals would make a difference; it wouldn’t create one new apprenticeship. The £1,000 subsidy is a small amount of money compared to the cost of training an apprentice. The extra money would just be given to employers that would have taken apprentices on anyway. To tackle youth unemployment, I would use the money to support the job guarantee scheme [giving the long-term unemployed under-25 a guaranteed job or training place].”
David Coates is associate director of think-tank The Work Foundation
Official figures obtained exclusively by Personnel Today reveal the government is struggling to provide enough Local Employment Partnership (LEP) jobs to keep up with the rising number of the long-term unemployed.
The figures show between July 2008 and June 2009 there were on average 15 people claiming unemployment benefits for every LEP vacancy on offer. This figure peaked in December when Jobcentre Plus had 37 people claiming the dole for every LEP vacancy available.
London has been the worst affected area with on average 24 long-term unemployed people per vacancy, closely followed by Yorkshire and Humberside, where the figure was 22.