Wage subsidies brought forward to address youth unemployment in 20 “hotspots”

Areas of the UK with high levels of youth unemployment are to benefit earlier from government help designed to tackle the problem, Deputy Prime Minister Nick Clegg announced today.

Under the plan, wage subsidies to firms hiring out-of-work 18 to 24-year-olds are to be triggered early in certain “hotspots” of unemployment among young people.

In 20 deprived towns and cities, principally in South Wales, Scotland and the North and Midlands of England, the payments will be available for young people who have been out of work for six months instead of nine.

Part of the government’s GBP1bn Youth Contract which was launched late last year, the subsidy of GBP2,275 is designed to encourage firms to take on young workers. It covers six months of employment and is equivalent to half the UK’s minimum wage for a young person.

Announcing the plan at the CBI Action for Jobs Summit, Nick Clegg said that the problem of youth unemployment predates the financial crisis and targeted support must be provided “to the youngsters who struggle to break into the workplace – regardless of whether we’re in good times or not.”

This opinion was shared by CBI director-general John Cridland, also speaking at the today’s jobs summit, who commented that youth unemployment has been rising since 2004 and said that a return to growth alone will not be enough to tackle the underlying causes of the problem.

Cridland urged businesses and the government to work together to do more to give people the skills and opportunities they need to get jobs. He also called for the range of employment initiatives to be made simpler for employers, noting that employers in England alone face 47 different initiatives that offer funding and support for businesses taking on and training young unemployed people.