Grappling to turn simple manifesto pledges into reality, the government wants companies to employ more young people. But most firms will have to find other ways to help.
WELFARE TO WORK
The government’s proposed ‘new deal’ for unemployed young people will need flexibility if all sizes of business are to participate, according to the results of detailed consultation with companies and others over the summer. Genuine training must be included in the environmental option, while work experience must be integral to education and training elements, respondents argued.
In a speech on September 11, Gordon Brown MP, the chancellor of the exchequer, said role models for the young people are essential and called for 50,000 coaches and mentors to be recruited from those in work. His list of companies said to be interested in the New Deal scheme includes Allied Domecq, offering 1,000 opportunities, Tesco with guaranteed interviews to New Deal youngsters, Ford promising extra training places, along with unspecified help from BAA, Lloyds TSB, Marks & Spencer, Unipart, GrandMet and Tarmac.
At the end of September, the government announced that a programme of support for young people who want to start their own businesses will now be included as an option, with 20,000 18 to 24 year olds given training, support and an allowance to become self-employed. Discussions continue with the Prince’s Youth Business Trust about a possible contract to deliver this service.
At the start of August, bids were invited from the private sector to run two of the 12 pathfinder areas where the New Deal is to start in January 1998, three months ahead of the rest of the country. The public sector is now to be involved as well, reflecting the reality that public sector organisations provide one in five jobs and that in the most needy parts of the country, where youth unemployment is concentrated, there are simply not enough private sector employers.
On August 22, a broadly-based advisory group was announced, including corporate community affairs managers from NatWest and Kellogg’s, to assist the task force chaired by Sir Peter Davis. Contact DfEE Enquiries on 0171 925 5555
EMPLOYMENT ZONES
The government is inviting bids from partnership agencies involving companies to run Employment Zones in five local communities. The aim is to test innovative ways of helping particularly needy unemployed people, such as over 25 year olds out of work for more than a year, ex-offenders, lone parents or people with disabilities. Due to start in February 1998, ?33 million is on offer, with normal rules about benefits and availability for work being relaxed. Each Zone must include schemes to move people from welfare into self-employment and have a strong emphasis on qualifications. Contact DfEE Enquiries on 0171 925 5555
NEW RECRUITS
One in three companies (35%) are planning to take on people under the Welfare to Work programme, a survey by the private finance company, 3i, has found. Based on 437 respondents from a random sample of 1,000 3i funded companies, larger firms appear more likely to recruit in this way. Six in ten said the places would not replace existing posts; just 6% said they would replace existing workers. Companies expressed a strong preference for youth trainees, with just 3% preferring the long term unemployed. Contact 3i on 0171 928 3131
COSTLY SUBSIDIES
A study of 42 existing welfare to work schemes in the UK has found fewer than three in ten people find work as a direct result, with costs per person of up to £8,000. Conducted by the London School of Economics for the Joseph Rowntree Foundation, Bridges from Benefit to Work found that schemes offering individuals extra money (such as Jobmatch and Jobfinder’s Grant) are more cost effective than those which offer employers a subsidy (such as Workstart). Contact York Publishing on 01904 430033
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The pressure on companies to sign up to the New Deal is intense. The government believes the credibility of the scheme (and its effectiveness) depends on the numbers of young people getting into “proper jobs”. Both it (and most of the new MPs, according to MORI data which we examine in detail later in this issue) clearly judge corporate reputation on involvement in schemes like this, rather than on traditional donations-based community affairs alone.
But what to do, as most companies for sound economic reasons no long recruit many school leavers or unskilled young people? Some many revisit that issue, with the wage subsidy and training allowance tipping the balance. For most large companies, however, more feasible is to help others, rather than offer direct employment: providing mentors, supporting community groups and environmental groups to run their two ‘options’, backing SMEs and micro businesses take on the youngsters, increasing help to PYBT and others to deliver the self-employment ‘option’, and generally getting involved in local job creation partnerships.
One danger in all this is that the most attractive young people will get the private sector jobs, with the voluntary sector options becoming viewed as second best. Another is that, far from pushing people into work, the loss of benefits will actually push a hard core off the bottom of society and further into the informal economy, petty crime and delinquency. Traditionally the voluntary sector has been better at reaching out to these people than state schemes. So real help from companies to the charities on the frontline may actually turn out to be the best social contribution they can make.
The pressure on companies to sign up to the New Deal is intense.
The pressure on companies to sign up to the New Deal is intense. The government believes the credibility of the scheme (and its effectiveness) depends on the numbers of young people getting into “proper jobs”. Both it (and most of the new MPs, according to MORI data which we examine in detail later in this issue) clearly judge corporate reputation on involvement in schemes like this, rather than on traditional donations-based community affairs alone.
But what to do, as most companies for sound economic reasons no long recruit many school leavers or unskilled young people? Some many revisit that issue, with the wage subsidy and training allowance tipping the balance. For most large companies, however, more feasible is to help others, rather than offer direct employment: providing mentors, supporting community groups and environmental groups to run their two ‘options’, backing SMEs and micro businesses take on the youngsters, increasing help to PYBT and others to deliver the self-employment ‘option’, and generally getting involved in local job creation partnerships.
One danger in all this is that the most attractive young people will get the private sector jobs, with the voluntary sector options becoming viewed as second best. Another is that, far from pushing people into work, the loss of benefits will actually push a hard core off the bottom of society and further into the informal economy, petty crime and delinquency. Traditionally the voluntary sector has been better at reaching out to these people than state schemes. So real help from companies to the charities on the frontline may actually turn out to be the best social contribution they can make.
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