By Maximilian Clarke

£1 billion is to be invested in tackling the youth unemployment crisis as the number of jobless 16-24 year-olds continues to rise, Deputy Prime Minister Nick Clegg announced today (Friday) in Leeds.

The youth contract scheme will include both skills training, and subsidy incentives for employers who take-on young people.

Business lobbies, which frequently bemoan the skills level of graduates and caution the potential for long-term social end economic damage that arises from prolonged and widespread unemployment, have welcomed the news.

Reacting to the announcement, Dr Adam Marshall, Director of Policy at the British Chambers of Commerce, says:

“Youth unemployment is a huge challenge, and this package aimed at tackling the problem of record levels of young people out of work is welcome,” commented Dr Adam Marshall, Director of Policy at the British Chambers of Commerce.

“Our research tells us that employers lack confidence in the education system. In a recent survey of over 6,000 businesses, only 29% felt very or fairly confident in recruiting school leavers with A-levels or equivalent. Many companies are working hard to invest in young people in their local areas, but too often we hear that they are ill-equipped for the workplace.

“The government has to make it easier for businesses to hire young people. Employers often spend a large amount of time and money training up those young people not in education, employment or training (NEETs). The proposal to pay employers half of the minimum wage payment for the first six months will help businesses offset this cost.

“The government is right to include tough sanctions for those young people who do not fulfill their contract. Employers do not want to employ young people, train them up, and then find they leave without good reason. Businesses are ready to do their bit, and the Youth Contract will help provide a much-needed jobs boost for the young. But the government must also look at how the education system can match the needs of business, and so the supply of vacancies available to young people. Job Centre Plus must also play its part in matching young jobseekers to firms.”

Carmen Watson, Managing Director of Pertemps Recruitment Partnership, added: “This contract model will go a long way in providing sustainable employment that the UK jobs market desperately needs. Far too often have we seen measures that fail to have a long term effect because they don’t go deep enough in tackling the root problems of long term youth unemployment.

“Providing subsidies to private sector employers will directly engage businesses and encourage them to act in confidence, take on new young workers, and at the same time secure the future of their own companies. This scheme is a much needed effort to tackle joblessness among young people but it should only been seen as one step in the journey towards reaching this goal. However, a much more far-reaching initiative is required to dramatically reduce what is an incredibly worrying situation.”

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