MPs highlight scheme's shortcomings

The Government's youth contract is "insufficient" to tackle youth unemployment, a group of MPs has said.

The Work and Pensions Select Committee acknowledged that the contract was "a good start" but warned it would not be enough on its own, "given the scale of the current problem". The latest official statistics showed youth unemployment rose by 7,000 to 1.02 million in the three months to July.

The Work and Pensions Committee said it was worried that the Government would fall short of a number of the targets set out in its youth contract and identified other areas of concern.

A report by the committee found the target of providing 160,000 wage incentives were "unlikely to be sufficient to encourage employers to create jobs" and was a "very ambitious target". The flat incentive rate of £2,275 may also need to be increased to encourage recruitment in particularly depressed areas and to encourage the recruitment of disabled people, the report found.

The report also said careful monitoring was needed to ensure work placements were given to young people with little or no previous job experience and that unpaid work for experienced candidates could prove counter-productive.

Committee chair Dame Anne Begg said: "The youth contract is welcome but on its own it will not be enough to address the current unacceptably high level of youth unemployment. Young people need effective support from Government to counteract the disadvantage they have long suffered in the labour market but they also need a return to economic growth and a substantial increase in the number of new jobs.

"Some of the measures in the youth contract have been shown to be effective but they will only make a significant impact if all the targets are met. Our concern is that there is a real risk that the Government will fall short of its more eye-catching targets."

Welfare Minister Mark Hoban said the scheme was "ambitious" and "reflected the scale of the challenge" the Government faced. He said the Youth Contract was "bold and imaginative" and tackled issues that youngsters and businesses raised with ministers.

University and College Union general secretary Sally Hunt said: "Today's report is a timely reminder that much more needs to be done to give young people genuine opportunities to get on in life. The MPs are right to call the current levels of unemployment unacceptably high and we simply cannot afford to maintain these levels of youth inactivity.

"Sadly, the report comes at a time when university fees are rocketing, the number of people attending university is dropping and the Government has axed grants for 16 to 19-year-olds wanting to stay on at college."