Nick Clegg is to launch a scheme to deal with the “ticking time bomb” of young people not in education, employment, or training (NEETs), by inviting charities and businesses to bid for contracts to help teenagers get into work or learning.
The contracts, worth up to £2,200 for every teenager helped, will be given to organisations with expertise in supporting young people on a “payment-by-results” basis.
Organisations that win the contracts to provide tailored support to young people will receive an initial payment when the young person begins the programme, followed by two subsequent payments if the individual progresses.
Support will be targeted at 55,000 16-17-year-olds not in education, employment or training and without any GCSEs at C grade or above, with the aim of tackling the long-term effect that unemployment can have on a young person’s future earning potential.
According to the Department for Education, by the time they reach the age of 42, someone who was frequently unemployed as a teenager is likely to earn between 12 and 15% less than their peers.
The scheme, which is part of the Government’s Youth Contract launched last November, will give “total freedom” to those organisations that win the contracts, as long as they are successful in helping young people to gain long-term employment, take advantage of training opportunities or get back into education.
Clegg is to say: “Sitting at home with nothing to do when you’re so young can knock the stuffing out of you for years. It is a tragedy for the young people involved – a ticking time-bomb for the economy and our society as a whole.
“This problem isn’t new, but in the current economic climate we urgently need to step up efforts to ensure some of our most troubled teenagers have the skills, confidence and opportunities to succeed.”
The announcement follows news last week that the number of unemployed 16-to-24-year-olds rose by 22,000 to reach 1.04 million in the three months to December.
According to data from the Labour Force Survey, 12% of 16-17-year-olds (150,000) were not in education, employment or training in the third quarter of 2011.
The Chartered Institute for Personnel and Development (CIPD) welcomed the Government’s efforts in this scheme to specifically target the most difficult-to-reach groups that have the poorest qualifications.
Katerina Rüdiger, skills policy adviser at the CIPD, said: “If we can break the cycle of no experience, no job, there is a real opportunity to boost employer perceptions of young people, and spare the economy the negative consequences of a significant minority of young people who grow up with little experience of work. Research shows that the more contact young people have with employers, the better their chances of finding themselves in stable employment.
“Targeting employability support at people who’d likely struggle to find work even in times of stronger economic performance is the right approach. Those with very low qualifications and no experience of the workplace are the ones genuinely most at risk of the scarring effect of youth unemployment.”
However, Liam Byrne, shadow work and pensions secretary, said that the scheme will not help the majority of young people struggling with unemployment.
He said: “[Clegg] promised big answers to the problem of youth unemployment yet what we have got today is something that won’t help 95% of Britain’s young unemployed,” said Byrne. “This is much too small and much too late to tackle a problem that is likely to cost our country £28 billion over the next 10 years. The Government needs to bite the bullet and put in place a sensible tax on bankers bonuses in the next budget to help get 100,000 young people back to work.”