Youth Contract have worked well, but that more radical solutions are needed in the future if youth unemployment is to be overcome.
When the Youth Contract was launched in April 2012, it was done so with the ambitious aim of helping 410,000 18- to 24-year-olds into work.
But the latest statistics from the Department for Work and Pensions (DWP), published just six months before the £1bn initiative expires in March 2015, make it difficult to measure whether the scheme is on track to hit its target.
The report compiles data for three strands of the Youth Contract - wage incentives, work experience placements and pre-employment training - for April 2012 to May 2014.
Comparing the data to the previous report, published in February, which features data for the initial 19-month phase of the scheme (April 2012 to November 2013), it is easy to see growth in all three strands.
The number of wage incentive payments made during the initial phase had doubled to 20,030 by May 2014; the number of young people starting a work experience placement increased by 48,000 between November 2013 and May 2014 to 147,670; and the number of 18- to 24-year-olds in pre-employment training increased by 19,430 during the same time frame to 60,790.
But neither reports provide details on the total number of people helped into work by the Youth Contract.
Stewart Segal, chief executive of the Association of Employment and Learning Providers, says the complex nature of the Youth Contract makes it difficult to measure the success of the scheme as a whole.
Instead, he says it is more useful to look at the individual strands of the initiative. "A number of streams have been successful and have given us an opportunity to develop new services – others haven't been," Segal explains.
"The wage subsidy hasn't been as successful as they had hoped, while other streams that include one-to-one support have been very successful, but these haven't got a long-term life because the Youth Contract will come to an end."
Segal says one-to-one mentoring is key to helping disadvantaged young people into work - a view backed by Judith Denyer, director of operations at Prospects, which delivers the Youth Contract to young people living in London.
Variety of support
Under the Youth Contract, Denyer says Prospects works with all young people on a one-to-one basis, recognising that each individual is different and will require different kinds of support.
"One of the successes of the contract is the flexibility it gives to providers to employ innovative and personalised interventions to suit the needs of eligible young people to ensure they move into sustained participation in education, training or employment with training," she explains.
"We find mentors make a big difference in supporting young people to re-engage into education, particularly if they've struggled with education in the past."
Perhaps it was the recognition that the wage incentive was not working as well as was hoped that prompted the DWP to announce in July that it was bringing forward the end of this element of the scheme by a month to August.
Under the Youth Contract, payments of £2,275 were offered to employers as an incentive to hire 16- to 24-year-olds who had been unemployed for six months or longer on a 26-week placement.
But the DWP decided to invest the money elsewhere and has said it will use the funding to provide targeted support through Jobcentre Plus for unemployed 18- and 19-year-olds from black and minority ethnic (BME) communities, who the department believe face greater barriers to work than other young people.
The DWP says it is part of a £4m package of targeted support designed to help young people who are difficult to reach.
Segal welcomes the idea behind the new support, but fears it could make the programme too narrow in focus.
"I'm very happy for any programme to have a theme that addresses the needs of BME, but that shouldn't be at the cost of making programmes less flexible, and it should be down to the training providers to put that support together," he says.
Segal suggests that the new support would be most effective if it were to be incorporated into existing regional Youth Contract programmes, fearing that its delivery through Jobcentre Plus could become "too confusing".
With the Youth Contract ending next March just before the general election, much uncertainty surrounds what the future shape of employment support for disadvantaged young people will look like.
Means-tested system
Labour leader Ed Miliband has already outlined his plans for a means-tested system available to 18- to 21-year-olds in training, but the other parties are yet to follow suit.
Segal would like to see the introduction of a national framework – a streamlined and less complex version of the Youth Contract – that providers can adapt to meet the needs of the local area.
As part of this, he says initial assessment will be vital so a provider can assess the challenges each individual faces and tailor the support to suit them.
"We do accept that there are different conditions locally," he says. "If we have a more consolidated approach, with traineeships as a major programme, it could be incorporated into support for those who are hardest to help, rather than coming up with a new programme in each locality."
However, Jenny North, director of policy and strategy at philanthropic organisation Impetus-PEF, The Private Equity Foundation, says a bolder move is required.
She says too much time and money has been invested in initiatives that, while having some results, are not delivering the transformational change required to end youth unemployment.
North says the introduction of a Secretary of State for School-to-Work transitions, with a clear responsibility for supporting young people into work, would be the most effective way forward.
"We need to take action, but, more importantly, we need somewhere for the buck to stop, which is why we are calling for a Secretary of State for School-to-Work," she explains.
"At the moment, responsibility for youth unemployment is shared among three departments - the Department for Education, Department for Business, Innovation and Skills, and the DWP - and when it's everyone's problem, it's no one's problem."
North says such a position would have to work closely with schools, further education providers and employers in order to be truly effective.
She would also like a greater onus to be put on schools to prepare pupils for employment.
"Currently, the very narrow accountability schools have for exam results means they end up neglecting vocational qualifications, careers advice and contact with employers," explains North.
"We would charge Ofsted with inspecting schools' efforts to produce school leavers who not only have the golden five GCSEs, but are also ready for work and the wider world that awaits them."
EXPERT VIEW: WAGE INCENTIVE DEMISE MUST NOT DIVERT FOCUS FROM YOUTH UNEMPLOYMENT
Isobel Hatfield, researcher at the Institute for Public Policy Research
The news that the Youth Contract wage incentive is to be scrapped should come as no surprise. The latest statistics show that of the 99,110 young people who started a job as part of the wage incentive programme, less than 10 per cent completed 26 weeks work, enabling their employer to claim the full subsidy.
It is difficult to gauge how many of these limited success stories represent genuinely new jobs created by the wage incentive, and how many would have been employed regardless. The scheme has suffered from low take-up, perhaps a result of the bureaucracy involved. A greater number of employers took part in the scheme in the past year, but the increase has most likely benefited those who were going to get jobs anyway, ignoring those furthest from the labour market.
The Department for Work and Pensions intends to redirect the funding towards helping 18- and 19-year-olds from black and minority ethnic backgrounds into work.
In a 2012 report, the work and pensions committee revealed that unemployment among black men aged 16 to 24 was more than 50 per cent, so this targeted strategy should hopefully ensure that some of the young people that the wage incentive scheme did not reach get the support they need to get into work.
However, we must not let the recent rise in employment turn our attention away from youth unemployment overall, which remains much higher than the national average. As the economy recovers, the unemployment rate should continue to fall, but young people were struggling to find work for at least a decade before the recession, and we need to address the structural reasons for this.
Employers have long complained that young people leaving education are not ready for the workplace. But the best way to make sure young people have the necessary skills is for employers to take an active role in young people's training to ensure that they develop meaningful and employable skills.
The Institute for Public Policy Research's recent report sets out several policies to help reconnect employers with the youth labour market. A youth apprenticeship levy to be paid by all employers over a certain size will help to encourage more employer involvement in the vocational education and training system. The creation of "knowledge centres" can recruit employers to participate in more vocational education. And apprenticeships must be improved so that they are seen by employers and students alike as a high quality vocational route into work.
The demise of the Youth Contract wage incentive is no surprise, but raising long-term employment rates of young people must remain a political priority.
