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← Overview Database of Innovative Social Policies in Europe

Youth Contract

Country of implementation
General short description of the innovation
The Youth Contract is a national package of support options provided for unemployed 18-24 year olds. While continuing to receive their benefits they can be provided a job, training, pre-employment training or apprenticeship or they undertake work experiences. The policy package performs similar services as provided by Labour?s Future Jobs Fund. / / Work Experience Programme: Originally, work experiences lasted two to eight weeks and included continuation of permanent job search. Nowadays, 12 weeks of work experience are possible where the employer is willing to offer an apprenticeship to the young person. An extra 250,000 work experience places are planned for young unemployed aged 18-24. Young people can participate in the scheme after they have been claiming Jobseeker?s Allowance (JSA) for three months but before they join the Government?s main welfare-to-work scheme, the Work Programme. Originally, entry on to the scheme was voluntary and individuals could choose to leave the placement before it is complete. / / Sector-based work academies: The academies intend to help young people from England and Scotland to get into employment by offering e.g. pre-employment training, work experience placements and a guaranteed job interview in sectors with high volumes of local vacancies. Participation in this policy initiative is voluntary. However, once claimants decided for it participation becomes mandatory. The academy programme lasts for up to six weeks. In some cases it might be possible to get units towards a qualification. Since the sector-based work academies are run by various employers, colleges and training providers the outcomes are geographically and sector-wise very different. / / Wage incentives: One of the demand-oriented parts of the policy help employers financially when taking on a young person through Jobcentre Plus or the Work Programme for more 26 weeks (wage incentive). There will be 160,000 job subsidies/wage incentives worth up to 2,275 each. The wage incentives are provided to employers in the private, voluntary and community sector who recruit eligible persons for 16 hours or more each week. Payment rates are different for part-time and full-time employment (more than 30 hours) and incentives are paid to employers only after 26 weeks of employment start. Small businesses with less than 50 employees can claim a partial payment eight weeks after the employment start. / / Apprenticeship Wage Incentives: At least 20,000 Apprenticeship Grants for Employers payments worth 1,500 each are planned for employers who provide an apprenticeship to young people (see explanations on the AGE 16-24 programme) in England. / / Support for disengaged 16-17 year olds: In England, the programme is also accessible for 16-17 year old NEETs to get them back into education, training or a job with training. This is a payment-by-result initiative for those with no GCSEs (general certificate of secondary education) at grades A?C.
Target group
Policy Field
  • education
  • employment
  • social
Type of Policy
  • public
  • public-private partnership
Duration of the policy
Since April 2012
Scope of innovation
  • Budgets: 1 billion
  • Number of intended beneficiaries: about 430,000 additional opportunities for young unemployed people.
  • Spatial coverage: national
General description of (intended) objectives and strategies
The Youth Contract is an ALMP measure with the aim to ensure that jobless young people are earning or learning again before long-term damage due to unemployment is done. It seeks to achieve this objective by supply and demanded sided policies.
Type of ideal-typical strategy for the innovation
  • dualisation
  • liberalisation
Type of innovation
  • retrenchment or expansion of an existing/earlier policy
New outputs
  • benefit eligibility
  • others (participation in education)
  • subsidies/tax-credits
  • training schemes
Clarification of intended mechanisms, outputs and outcomes (optional)
The policy package intends to support young people not in employment, education or training (NEET) through supply and demand-led policies. This is accompanied by tightened JSA benefit eligibility and reinforced conditionality and sanctioning elements.
Intended target group
Young people aged 18-24, parts of the policy package are open to 16-24 and 16-17 year olds
Working age population
  • employment situation (unemployed)
  • main source of income: social protection (social assistance)
Actors involved in policy-making/implementation and/or evaluation
  • agency or national social insurance body (Jobcentre Plus)
  • central state (DWP)
  • employers (organised or individual)
  • private for-profit organisations (commercial)
  • private not-for-profit organisations (e.g. Third Sector organisation or NGO)
Intended output
  • benefit duration
  • benefit eligibility
  • learning workplaces
  • subsidies/tax-credits
  • training schemes
Clarification of outcomes in terms of impacting resilience and labour market inclusion
A report of the House of Commons? Work and Pension Committee concludes that the Youth Contract is an important initiative to address youth unemployment and likely to alleviate the labour market disadvantage felt by the broad youth population. However, this will not solve the problem of youth unemployment. Notably the ?wage incentives of the kind offered under the Youth Contract may be less likely than some previous schemes to incentivise the recruitment of young people in areas of highest youth unemployment and those in particularly disadvantaged groups. In particular, DWP will need to consider carefully whether changes to the scheme?s design will be required to promote the employment prospects of disabled people and young black men? (Work and Pensions Committee 2012). The report also highlights some value-for-money concerns about delivering wage incentives via the Work Programme. / / Research published by the DWP in 2013 confirms the findings of the Work and Pensions Committee in that it will be difficult for wage incentives to create a significant number of new vacancies. Only nine per cent of employers in the survey (Jordan et al. 2013) created an extra vacancy because of wage incentives. A further seven per cent would not have recruited a young unemployed person, but for wage incentives. Moreover, ?findings indicate that some jobs which employers are claiming for are not permanent jobs ? 31 per cent of employers said that the job was temporary or on a fixed-term contract. There is also a suggestion in the survey findings that a relatively high proportion of newly created jobs are temporary or fixed term? (Jordan et al. 2013: 63). / / Earlier research of the Department for Business Innovation and Skills (BIS) found that in general ?interventions that assist those out of work to apply for jobs appear to be very cost effective and achieve positive results; direct job creation is generally ineffective; training programmes have mixed results; and programmes targeting young people tend to be less successful than those for older people?. This would however not exclude that there are policies ? including training programmes targeting young people ? that are successfully delivering positive results. Especially targeted programmes that combine training with periods of work experience, contact with employers and assistance with job search, and that lead to recognised and relevant qualifications, are likely to produce positive results (Wilson 2013:6-7). / / In October 2013, the Social Mobility and Child Poverty Commission found that from the original funding for 160,000 wage incentives provided by the government only 21,000 applications were made by May 2013, and only 2,070 payments were made for young people completing 26 weeks on the scheme. This means that, a quarter of the way through the programme, only one eighth of the places, and one-eightieth of the subsidies, have been used (Grice 2013). A more recently published report on customers? experiences of the Youth Contract suggests that most Youth Contract beneficiaries who had taken up support options were likely to say that they found them helpful (TNS-BMRP 2014:103). Where participants had a work experience placement as part of the sector-based work academy, 42 per cent were offered a job at the end of the placement. Most of these participants took up the offer and were still in the job several months later. / / References: / - House of Commons. Work and Pensions Committee (2012). Youth unemployment and the Youth Contract. Second Report of Session 2012-2013, Vol. 1. London. / - Grice, A. (2013). Flagship 1bn youth unemployment scheme branded a failure, The Independent, 22 October 2013. / - Jordan, L., et al. (2013). Early evaluation of the Youth Contract wage incentive scheme, DWP Research Report No. 828. / - TNS-BMRB (2014). Customers? experiences of the Youth Contract, DWP Research Report No. 865, London. / - Wilson, T. (2013). Youth unemployment: Review of Training for Young People with Low Qualifications, BIS Research Paper No. 101, London.
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