New measures to counter youth unemployment

31 July 2013

Whilst youth unemployment has fallen by 59,000 since the launch of the Youth Contract in April 2012, figures published last week by DWP show that the scheme has fallen substantially short of original targets.  This flagship scheme has funding to pay 160,000 wage subsidies of £2275 to employers who recruit and retain an eligible young person for 6 months or more. After 12 months, however, only 4690 subsidies have actually been paid. So why the considerable shortfall in take up? And what does this tell us about the future prospects for the latest initiative to help young people into work – Traineeships?

It’s over a year since Deputy Prime Minister, Nick Clegg, first set out the plans for Traineeships which are available from this month.  Full details of this initiative have become clearer since the Spending Review in June, which led to the welcome announcement that the programme would be extended to young people up to the age 24, after being initially limited to 16-19 year olds.

Since June we’ve also seen the publication of an updated Framework for Delivery, which addresses many questions around eligibility, funding and complexities linked to the benefits system.  Clarification that young people taking part in a Traineeship will be able to continue to receive Jobseeker’s Allowance is welcome. However what will the impact be of different eligibility rules and funding methodologies for the 16-18s and 19-24s? And what will the implications be for providers as they deal with the split in funding between Education Funding Agency and the Skills Funding Agency?

Targeted at young people who are currently out of work, have little work experience, but have a reasonable chance of getting a job, Traineeships will provide a welcome and important ‘bridge’ for many young people.

Whilst the core content of the programme will be focused upon successful work preparation training, English and maths delivery and a work experience placement, flexibility and quality will be crucial to the success of the programme.

With good initial assessment, flexible delivery and tailored support for learners, providers have the opportunity to make a real difference in preparing young people for work experience.  However, the work experience placements themselves are likely to present more of a challenge. Providers will need to invest time and energy in securing Traineeship placements of between 6 weeks and 5 months that are of a ‘high quality, substantial and meaningful experience for the individual’.

Whilst funding rates (announced by the SFA) will involve payments of up to £900per Trainee for the provider, the incentive for employers to offer a placement is less clear. At a time when employer margins continue to be tight, many (particularly SMEs) are likely to seek incentives linked to the costs of planning, delivering and staffing a work experience placement that will give a Trainee a real insight into the world of work.  In the absence of any payment, how much of a danger is there that some employers will either a) not engage with the new Traineeships at all and refuse to provide the work experience placements that are needed or b) they will engage but in a half-hearted manner, offering poor quality work experience placements that don’t meaningfully support Trainees to gain the relevant vocational skills necessary to progress into work or onto an apprenticeship.

Like many initiatives Traineeships will no doubt evolve over their lifetime.  Providers and employers throughout the country will develop innovative and creative ways of ensuring that Traineeships have a tangible impact on young people and provide a pathway to secure and rewarding careers.  Through a range of development work, NIACE looks forward to supporting providers and disseminating effective practice in the delivery of Traineeships, so that all Trainees have the opportunity to benefit from an experience that secures the best outcomes for them.