Clegg's Youth Contract flops as just 4,690 jobs are delivered

The wage subsidy scheme that Clegg promised would create 160,000 jobs delivered just 2.6% of that total in its first year.

While ministers hailed the latest fall in unemployment as proof that the economy is finally moving from "rescue to recovery", significant problems remain, with long-term unemployment (defined as those out of work for more than a year) at a 17-year high of 915,000 and youth unemployment at 959,000, or 20.9%. 

It was to tackle the crisis of youth joblessness that Nick Clegg announced the government's £1bn Youth Contract scheme in November 2011, promising employers wage subsidies worth £2,275 to take on 160,000 18- to 24-year-olds over the next three years. It would, he promised be "a major moment for Britain’s unemployed young people". 

More than a year and a half on, the first results are in - and the news isn't good. Since the scheme was fully launched in June 2012, just 4,690 wage incentive payments and 21,000 "job commitments" - taking on a young person and requesting a wage incentive claim form - have been been made. 

After a week of 'good news' for the government, Labour has pounced on the figures, with Liam Byrne declaring: "The welfare revolution we were promised has fallen apart. The Work Programme doesn't work, Universal Credit is disappearing into the sunset, and now we know that the Youth Contract has been a disaster." He pointed to Labour's Jobs Guarantee, which offers employment to any young person out of work for more than a year, as an alternative approach.

In anticipation of today's figures, Clegg last week announced a Cabinet Office-led review of the government's youth employment schemes, telling the CBI that "the average school leaver doesn't have a clue about which government departments or agencies look after the schemes that are out there to help them". 

But after a wasted year, he will struggle to explain why the coalition still isn't working for the young and jobless. 

Deputy Prime Minister Nick Clegg speaks during a press conference at Admiralty House on May 22, 2013 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

New Statesman cover
Show Hide image

The New Statesman Cover | Cool Britannia 20 years on

A first look at this week's magazine.

28 April - 4 May 2017
Cool Britannia 20 years on

0800 7318496