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Employers urged to sign-up to £1 billion Government contract to be ready to employ young people in April


The deputy prime minister has called on businesses to sign up to the government’s £1 billion Youth Contract so they are ready to offer the jobs to young people in April.

Thousands of companies have already received a letter from the deputy PM Nick Clegg (pictured with apprentices at McDonald's) and minister for employment Chris Grayling, calling on them to play their part in getting young people earning or learning.

Clegg announced details of how employers can access cash to help cover the cost of taking on fresh talent through a 'wage subsidy'. The subsidy will be paid to companies for taking on young unemployed people and is designed to cover costs like National Insurance contributions.

The wage subsidy will pay £2,275 to employers for every 18 - 24 year old unemployed person they employ from the Work Programme and is open to all businesses, voluntary organisations and charities.

Payments for the majority of business will be made after the young person has been employed for 26 weeks.

For smaller enterprises these payments will be staggered, with the first payment after 8 weeks and the rest after 26. This recognises that smaller businesses need a boost to their cashflow to make the jobs viable.

The wage incentive will also be available for part time positions, with a rate of £1,137.50 if someone is employed between 16 and 29 hours.

Clegg said: "Getting young people earning or learning is my top priority, and that's what the Youth Contract is going to do. This is a long-term boost to help business get young people into jobs before long-term damage is done.

"Employers have a huge part to play in this and the subsidy we're announcing today benefits business and young people.

"Today I'm writing out to thousands of employers of all sizes - from global corporations to small local firms - calling on them to look at what we're offering through the Youth Contract and sign up to offer jobs from April. This is a significant moment and a call to arms for businesses to offer long-term opportunities to young people who are out of work."

Grayling added: "Our primary goal is to get young people into employment. With the wage incentive we are encouraging employers to take a chance on a young person who otherwise may have been looked over for a lack of experience or skills.

"Over the three months since we announced the Youth Contract we have consulted with businesses large and small to develop a system that works for them."

The Youth Contract was launched in November, aiming to lift all young people out of unemployment. It will support at least 20,000 extra incentive payments worth £1500 each for employers to take on young people as apprentices, taking the total number of payments available to 40,000.

250,000 additional work experience places will be created through the Department for Work and Pension's work experience and sector-based work academies programmes.

Extra support will be given through Jobcentre Plus in the form of weekly, rather than fortnightly, signing-on meetings, more time to talk to an adviser and a National Careers Service interview.