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Study Notes

Unemployment Policies - The UK Youth Contract

AS, A-Level
AQA, Edexcel, OCR, IB

Last updated 22 Mar 2021

The Youth Contract is an important intervention in the labour market designed to address some of the complex issues surrounding persistently high rates of youth unemployment in the UK.

Find more statistics at Statista

"Long-term youth unemployment is a national disgrace that can leave a life-time scar."

The main aim of the Youth Contract is to assist as many young people as possible into sustained employment. It was aunched in April 2012 and has a number of features:

  1. Apprenticeship Grant for Employers of 16-24 year olds. This government subsidy pays £1,500 to employers with less than 50 employees that take on young apprentices.
  2. Work experience: Placements are available for 16-24 year olds, through Jobcentre Plus who have been claiming JSA for at least 13 weeks.
  3. Support for 16 and 17 year old NEETs: Payments of £2,200 are made to providers who take on 16 and 17 year olds who are not in education, employment or training and who have low or no qualifications, and those from other disadvantaged backgrounds.
  4. Wage incentives: Wage costs for workers with limited experience and perhaps relatively low productivity can be a barrier for businesses considering taking on a young unemployed person. The Youth Contract offers a government payment of up to £2,275 for an employers who takes on young people (aged 18-24) claiming Jobseeker's Allowance (JSA) for more than six months. This aspect finished in August 2014.

Overall the Youth Contract aims to expand the opportunities for young unemployed people to find relevant work experience, hands-on training and to start the process of building a positive employment record after they leave school or college. It needs to be seen in the wider context of other government programmes such as (effectively) increasing the school leaving age to 17 and also requiring that all school leavers have a suitable qualification in English and Maths.

Find more statistics at Statista

Estimated number of NEETs in the UK economy in 2015

943,000 people aged 16-24 were NEET in the first quarter of 2015, 13.0% of people in this age group. Schemes introduced by the previous Government with elements aimed at reducing the number of young people who are NEET included: raising the participation age, the Youth Contract and the Work Programme.

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