Is Clegg's £1bn back-to-work plan a NEET idea?

Remember Nick Clegg? The Deputy Prime Minister has been reminding everyone who he is by unveiling £1bn plans to create jobs for young people, of which more than 1m are now unemployed. But Clegg reckons he can change that by, among other things, offering businesses £2,275 of subsidies to take on 160,000 18- to 24-year-olds for six months (not all at once, obviously), giving them the vital experience they need to kick-start their careers. Clearly, it’s great news for both the ‘lost generation’ and businesses, whose workforces are becoming increasingly stretched. Although there are one or two awkward questions about where the money’s going to come from…

Clegg’s plans are as comprehensive as they are radical: the scheme starts in April, and will run for three years. Among the proposals are up to 400,000 work and training placements which will be created by paying businesses half of the national minimum wage per youth employed, while another 250,000 18- to 24-year-olds who have been out of work for three months or more will get eight-week work experience placements.

He has also set aside £50m for the 250,000 most disadvantaged 16- and 17-year-olds in England to get them into jobs or apprenticeships – plus various support programmes at job centres. He was keen to impress that a certain amount of commitment would be required of anyone who took part in the programme. If they drop out of a subsidised job or work experience placement, he said, they lose their benefits, too.

Now obviously, there is a need for this sort of thing: as Clegg pointed out today, with youth unemployment so high, young people are becoming ‘demoralised’ by the lack of opportunities out there. ‘It provides hope to the many, many young people who, at the moment, are feeling very anxious and uncertain about their future.’

But there’s also the issue of cash: the Government’s coffers aren’t exactly brimming at the moment, so where will it find the money? Clegg was clear that the cost of the initiative wouldn’t come out of savings the Government has already made, but will instead be paid for from ‘a number of savings’ to be announced by the Chancellor in his autumn statement on Tuesday. Sounds ominous. So while businesses seem very happy about it at the moment, we wonder if the same sentiment will be expressed come Tuesday afternoon…

There’s also no guarantee that the scheme will actually work. In economic climates like this, job creation schemes don’t have the most positive track record - anybody remember YTS in the eighties? There’s a risk that rather than creating new jobs, businesses would make use of the subsidies to pay the wages of people they’d have employed anyway. So we’ll see what happens there.

Meanwhile, Danny Alexander, the chief secretary to the Treasury, has used the run-up to the Autumn Statement to announce another bit of good news – namely, more investment in infrastructure. Although Alexander was vague on detail during his speech to the National Association of Housebuilders yesterday, he said that Whitehall’s spending would be cut in order to put extra money into infrastructure projects. Which no doubt means fewer committees for civil servants to attend. Now that’s something to strike about.