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14 September 2011

How can we tackle youth unemployment?

The government's Work Programme will fall short unless employers are incentivised.

By Fred Turok

Youth unemployment today reached 973,000, and it looks like it will soon climb above the one million mark again. Add this to a back drop of the summer of 2011 where British youth rampaged through the cities of England, causing millions of pounds worth of damage, incalculable disruption to our high streets and untold distress to the people who live and work in the affected areas.

Is this youth unemployment, cause and effect? As a nation we’re heading towards a black hole. If we do not have a viable remedial strategy — one we all buy into — then the summer of 2011 will be repeated more frequently and in more places across the land. I’m not being alarmist, just a realist.

So what could that national strategy be? It has to be based in partnership between employers, government and the third sector. Government must show leadership and provide the funding, but employers must match this commitment. They must understand and acknowledge the role they have to play in helping to heal this deep societal wound — the eradication of hope and opportunities of our youth. After all, employers accept their responsibilities when it comes to the environment, equality and employee rights, so why not their role and responsibilities to future generations? They can make an immediate and very practical impact which would have huge benefits. This could be as simple as looking at the reality of youth unemployment, mentoring young people and helping them understand the reality of the world of work, or offering work experience and apprenticeships.

Yes we’ve got the government’s Work Programme, and yes some employers have accepted jobseekers from the programme, but their involvement is merely on an ad hoc basis. If initiatives such as the Work Programme are to succeed, then it has to be employer-led and for that to happen, employers should be incentivised. Perhaps the cost of employing a long term jobseeker should be fully tax deductible — that would make a huge difference to employers and, given the fact that over 90 per cent of business are small and medium enterprises (SMEs), it would also make a huge difference to the number of organisations supporting the programme and ultimately supporting the one million odd young jobseekers.

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But the public sector also has to play its part. We cannot place the burden of reducing unemployment and rebuilding our communities solely on the private sector, because there has to be a partnership between government and the private sector, the public sector and the third sector — the facilitators in this mix. We all have our part to play if a remedial strategy is to prove successful.

The truth is that the cost of incentivising employers would be more than offset by the positive impact on our society, as well as the significant drop in benefits claims and immediate and future tax paid by young people with incomes in their pocket.

After the summer riots, we really do need to acknowledge the link between unemployment and social unrest and therefore we urgently need radical new thinking and radical new measures. We have had a wakeup call, so we have to do something. This is just the start.

Fred Turok is the founder and chair of youth employment charity TAG (Transforming a Generation).