£1bn Fund To Help Young Unemployed Find Work

A £1bn fund to help young people back into work has been launched by the Government as figures show record numbers are not in jobs, education or training.

Deputy Prime Minister Nick Clegg unveiled the Youth Contract which is aimed at helping the young unemployed find work or return to education.

The latest figures on youth unemployment revealed that a record 1.163 million people aged 16 to 24 were not studying, in work or training.

Mr Clegg denied the new fund was introduced as a panic measure in response to the poor statistics.

"I'm a parent of three young children and like all parents we all worry about the kind of country our children are going to live in," he told Sky News.

"My fear which I think many people share is that the young people of today shouldn't pay the price of the mistakes of our generation."

He said the scheme enabled young people to "earn or learn" and differed from the last Labour administration's approach because it put the emphasis on the private sector not government jobs.

Asked if workers from other countries are more employable, he replied: "I completely reject those people who talk down our young people.

"I meet so many of them [British youngsters] who are well-qualified, motivated, who want to get ahead, who have great dreams and aspirations, really strong values, a strong work ethic."

Youth joblessness is a problem Mr Clegg has described as "economic waste and a slow burn social disaster".

He said the new deal, which will begin next April, will find work for at least 410,000 young people over a three-year period.

The Government will also offer wage subsidies worth £2,275 for employers for the first 160,000 18-24 years-olds who are given work.

Under the Youth Contract any unemployed young person will be granted an eight week work experience placement if they request it.

However, Mr Clegg warned that those who do not sign up for the new agreement will be asked to carry out "mandatory work activity" and those who drop out of jobs or work experience schemes will risk losing their benefits.

Mr Clegg said: "This is a £1bn package and what's different about it is it gets young people into proper, lasting jobs in the private sector.

"But it's a contract, a two-way street: if you sign up for the job, there'll be no signing on for the dole. You have to stick with it."

The Deputy Prime Minister insisted the cash involved would be "new money" despite Opposition claims it will be funded by scrapping tax credits.

Entrepreneur Lord Sugar - who helped advise the last Labour government - told Boulton and Co the coalition Government is "on the right track" with its proposal.

He said cash could incentivise employers to hire young workers.

Speaking of his own IT firm, he said: "Kids are coming knocking on our door all day long asking for jobs and we literally can't give them any jobs because we haven't got the work."

He blamed the decline in British industries and an education system too preoccupied with academic results.

"In my day there were the boffs who did well at academia, who went off to become doctors and lawyers, went to universities.

"And there were the ordinary guys, which I was one of, who went into a factory, went onto the shop floor and learnt something," he said.

There is no substitute for learning on the job, Lord Sugar added.

Unions have welcomed the new scheme, with Brendan Barber , the General Secretary of the TUC describing it as "long overdue".

"It may be late, but the TUC welcomes elements of the plans being announced - the job subsidy, training and extra help from jobcentres effectively recreate the most positive elements of the last government's New Deal for Young People, which the TUC strongly supported," he explained.

However, Mr Barber expressed concerns about the offer of work experience: "There are already widespread reports of young people on the programme being exploited.

"Keen unemployed youngsters desperate to find work shouldn't be conscripted into edging out other workers who should have been paid the going rate for the job."

Shadow work and pensions secretary Liam Byrne also said he doubts about the scheme.

"The Tories killed the Future Jobs Fund and young people have paid a brutal price for this, with youth unemployment hitting a million and long-term youth unemployment up 83% this year.

"And if the Government is slashing working families tax credits to pay the bill for this new scheme, it beggars belief.

"That tells you everything you need to know about how out of touch the Government is with the needs of our young people and squeezed middle families across Britain."