The government has announced new support for apprenticeships as the youth jobless figures rise above one million, while business groups have called for tax incentives for companies to take on young people.
On Wednesday, the government announced a new 1,500 subsidy for small businesses to take on apprentices under the age of 25. Apprenticeships have been the main policy response to the growing challenge of youth unemployment, but critics say that while the number of schemes have increased, many places have gone to older or already qualified workers. Research by the Institute for Public Policy Research (IPPR) showed that three-quarters of new apprenticeships created last year went to over-25s.
Business secretary Vince Cable said: “The apprenticeships programme is a success story, with record numbers of learners starting an apprenticeship this year. But I have listened to employers, and will go further to ensure that investment is targeted where impact is greatest, delivering the specific skills businesses need to drive growth."
Tony Dolphin chief economist at the IPPR, said that the announcement was "a step in the right direction", but said that more needed to be done.
"The apprenticeship brand should be reserved for young people aged 25 and under. Apprenticeships should not just be seen as a knee-jerk reaction to higher unemployment. They also have a role to play on socialising young people and preparing them for a life of work," he said.
“Apprenticeships can help young people break out of the unemployment trap by offering additional general education, the chance to learn the ‘soft skills’ that employers often demand and specific job-related training. But employers have become increasingly reluctant to hire school leavers. They need more support to set up apprenticeship programmes, particularly when they are hiring apprentices for the first time.
The Confederation of British Industries (CBI) said that a "Young Britain Credit", worth £1,500, could encourage firms to hire 16-24 year olds, as well as reform to the benefits system "to make work really pay" and link up businesses and schools.
“These figures underline why we need urgent action to help our young people take their first steps in the labour market. A generation risks being scarred by the devastating effects of long-term unemployment," CBI director general John Cridland said.
The Federation of Small Businesses (FSB) said that a cut to national insurance contributions for 16-24-year olds employed at micro-enterprises would "target tax cuts at where they are most needed."
John Walker, the FSB's national chairman, said: "The Government must ensure that young people are not hindered at the very beginning of their careers. This policy would help achieve that, and at the same time improve the climate small firms trade in. We cannot afford to watch this generation just disappear from the workforce."