Stephen Timms – 2015 Parliamentary Question to the Department for Work and Pensions

The below Parliamentary question was asked by Stephen Timms on 2015-02-11.

To ask the Secretary of State for Work and Pensions, what assessment he has made of the effect of the withdrawal of the Youth Contract Wage Incentive Scheme on youth unemployment; and if he will make a statement.

Esther McVey

The wage incentive was always intended to be a time limited measure. It was designed to support employers during the recession. It has provided nearly 100,000 job opportunities for young people. The economy is recovering; the UK has witnessed the largest annual drop in youth unemployment since records began.

Our focus now is to make sure young people have the skills they need to take up these vacancies. The reinvestment of money from the wage incentive scheme into other areas has enabled us to continue to drive down youth unemployment with the most recent figures showing youth unemployment down 188,000 in the last year and by nearly 200,000 since 2010. During 2014 youth unemployment recorded its largest annual fall on record and long-term youth unemployment has also fallen by more than 50,000 in the last year.

Since the wage incentive was introduced, take up by employers has been lower than expected. Employers found it less attractive than other elements of the scheme. DWP listened to businesses and responded to their needs, as such we reinvested money into those groups who are hardest to help to:

· Provide additional advisor time for young people in areas of high youth unemployment and for disadvantaged 18-19 year old NEETs;

· Provide additional funding for BIS to support young people further away from the labour market by providing education and training activities intended to lead initially to traineeships or equivalent provision and subsequently employment.

· Support the 16-17 NEET pilots and BIS 18-21 Work Skills pilots

· Provide additional funding for City Deals;

· Extend the New Enterprise Allowance scheme to December 2014 and provide funding for BIS for start up loans