Youth job scheme gains ‘wiped out by rising costs’ – Daily Business

Business leaders have told the UK government that creating taxpayer-funded jobs for young people will achieve nothing while companies are cutting back or closing down because of higher costs.

The government has announced that 55,000 six-month placements will be rolled-out from April. They will be “fully subsidised” for 25 hours a week, paid at the legal minimum wage from an £820m pot announced at the Budget.

The placements will be offered to 18- to-21-year-olds on universal credit who have been looking for work for 18 months.

Opportunities will be created in sectors such as construction, health and social care and hospitality and young people will be stripped of their right to claim benefits if they refuse a taxpayer-funded job after 18 months without a job, the work and pensions secretary Pat McFadden said.

However, Michael Kill, chief executive of the Night Time Industries Association, said: “The Government’s announcement of £800 million to tackle youth unemployment risks missing the point entirely if the businesses that create jobs are being priced out of existence. You cannot subsidise people into jobs that no longer exist.

“As one of the biggest employers of young people, we are keen to support efforts to get young people into work. But right now, it feels like giving with one hand and taking away with the other.”

He added:” “Across hospitality, nightlife and the wider visitor economy, businesses are facing unprecedented pressures, rising wage costs, higher taxes, increased regulatory burdens and mounting operational expenses. This has already resulted in thousands of job losses, reduced hours and business closures.

“Announcing large funding pots may generate headlines, but it does not address the structural reality: when businesses are struggling to survive, they cannot hire, train or grow. Jobs are created by thriving enterprises, not government schemes.

“If even a portion of this £800 million were redirected into direct business support, reducing the cost of employment, easing operational pressures and restoring commercial viability, the job opportunities for young people would follow naturally.

“Until Government policy supports the survival and growth of the sectors that traditionally employ young people, there will remain a stark contradiction between political promises and economic reality.”