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Ministers decided to end the Future Jobs Fund, which was set up under Labour, one year early as part of the Treasury's public sector spending cuts designed to reduce the budget deficit. But many graduates gained "valuable experience" in work funded through the scheme and the decision to close it comes at a time of rising unemployment among under-25s, the Commons work and pensions select committee said. The fund will close from March next year but its replacement, the Work Programme, will not begin operation until June at the earliest, leaving a "substantial number" of unemployed 18-24 year-olds at risk, the MPs said. The report comes after official labour market figures released last week showed that nearly one in five 18 to 24-year olds - 737,000 - were out of work. Almost 200,000 had been unemployed for 12 months or more. The MPs said in the report: "Periods of unemployment are detrimental to young people's future prospects and the longer the period out of work, the more serious the damage. "Given the significant increase in youth unemployment since 2008... we were concerned that the potential gap between the Future Jobs Fund and the Work Programme may lead to a substantial number of unemployed young people failing to receive any specialist support." The Future Jobs Fund was set up as part of the Labour government's drive to ensure that young people were not "left behind" as a result of long-term unemployment. Under the scheme, the government provided funding of up to £6,500 for each six-month job to be provided by social enterprise firms, charities and local authorities. But the Coalition decided to end the fund, which aimed to create 200,000 jobs, a year earlier than planned, in March 2011. The new government's own Work Programme to tackle unemployment will not begin operating until June next year, and even then will not cover the whole country for some time. A spokeswoman or the Department for Work and Pensions said: "The Future Jobs Fund is expensive and the Government believes that its increased apprenticeships programme is a much better way of getting young people into sustainable employment. Unemployed young people will get high quality support through the work programme which will be available nationwide by next summer. "We are also working with providers to extend referrals to existing provision to ensure that customers referred to these programmes in March will be supported until the summer, when the Work Programme will be rolled out." |
Growing numbers of school leavers and graduates face unemployment next year after the Coalition decided to abolish a £1bn fund to provide jobs for young people, MPs warn today, (21/12/2010).