9 Conclusions: the Youth Contract
approach
219. The Youth Contract is necessary as a broad range
of initiatives to address the current youth unemployment problem.
It builds on existing measures which have been shown to aid young
people's long-term employment prospects: JCP support; work experience;
and apprenticeships. Extra resources for these measures, along
with two new programmes, are a good start to the Government's
response to levels of youth unemployment which are detrimental
to both the individuals concerned and the future prosperity of
the country.
220. However, the Youth Contract will not on its
own be sufficient to create a significant number of jobs for young
people. A strong recovery in youth employment rates will only
be achieved with a return to economic growth and a substantial
increase in the number of job vacancies.
221. Wage incentives, the key element of the Youth
Contract, are likely to ease the labour market disadvantage of
16-24 year-old JSA claimants by helping to "level the playing
field" in the mainstream jobs market. However, without changes
to its design, the scheme is likely to be less effective than
some previous programmes in helping those with the greatest barriers
to employment. There are also valid value-for-money concerns about
delivering wage incentives via the Work Programme; the current
pilots, in which Jobcentre Plus is working directly with employers
to deliver the scheme, may demonstrate that this is the more efficient
and cost-effective route.
222. If the Youth Contract meets its targets it will
create around 430,000 additional opportunities for young unemployed
people. This is welcome but, given the large numbers who require
support, it will only make a significant impact if all the targets
are met. We are concerned that the more eye-catching targets—160,000
wage-incentivised jobs and 250,000 extra work experience and Sector-based
Work Academy placements—are too ambitious. The new NEETs
initiative may also struggle to reach the intended number of disadvantaged
young people.
223. A long-term solution to youth unemployment will
need to go far beyond the Youth Contract. The support provided
to make the transition from education to work is crucial for young
people's long-term prospects. Schools need support in deciding
how best to prepare young people for the world of work; it remains
to be seen whether the Government's reforms to the way in which
careers advice and work-related learning are delivered will contribute
to this.
224. Raising the participation age in England presents
an opportunity to improve provision for the majority of young
people who do not go on to university. Reform of post-16 vocational
educational and training is much needed but changes will only
be effective if they ensure provision is of high quality and properly
prepare young people to compete in the labour market.
| 
