George Osborne had said he would rethink the level of the Youth Contract wage subsidy in order to increase take-up of the scheme, following his Autumn Statement last year.
But the Department for Work and Pensions has now confirmed it has no plans to change the youth employment scheme, which offers employers £2,275 when they recruit an 18- to 24-year-old.
This is despite a recent evaluation of the scheme that found only nine per cent of employers who had recruited a young person eligible for the subsidy were incentivised to create an extra vacancy because of the money.
Liam Preston, parliamentary and policy officer at YMCA England, said an increase could encourage employers to hire more young people.
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