Price of a Placebo now £1 billion

Posted on: 25.11.2011    09:32:48

When will we ever learn? We need to treat the disease, not the symptoms and stop the education conveyor belt churning our seconds and rejects because those responsible for the moulds haven’t maintained then or have the wrong moulds in the machine in the first place.

The naivety of the plans announced by Nick Clegg are more suited to the era of Gordon Brown by creating barriers to competition and stopping cream from rising to the surface. This is plaster politics, at its worst, trying to patch up gaping wounds in our education system and forcing businesses to engage in support tricks to gain questionable subsidies of little long term benefit.

However for those of you interested here are the outline details but no doubt the devil will be in the detail:

  • 160,000 18 to 24 year-olds will have half of their minimum wage paid by the taxpayer in a move to tackle the record number of young people not in education, employment or training (NEET).
  • Employers will have to apply directly to Jobcentre Plus to get the new youth wage subsidy, worth half of the youth national minimum wage, under proposals to encourage business to hire more under-25s and curb growing youth unemployment.
  • The number of subsidies up for grabs, available from April 2012, is just a fraction of the total 1.02m young people out of work and will be reserved for those who need the most help on the Government’s new Work Program.

We understand that provided employers meet certain criteria, the new subsidy will also be dished out on a “first-come, first-served basis.”.

This is targeted at the hardest to help, the weakest, those probably with the poorest skills rather than those that may be scrapped into work but find themselves unemployed owing to the recession.

There is also the possibility of employers dumping existing employees in order to access the new support and the whole thing boomeranging on the Government.

The coalition are trying to cure the symptoms when it is clear to all that the decease is the education system itself and we have to tackle the supply side of the problem,

These problems date back to the decline in educational standards 50 years ago.Manufacturing and engineering companies need greater emphasis on boosting skills throughout the schooling system, to address young people’s “employability” rather than simply make them cheaper to employ. We need early streaming, a return of technical colleges from early teens and why not look at the Boy soldier route to boost apprenticeships where the infrastructure exists to help. There is no thinking outside the box, we need to be radical.

I recently spoke at a European Union sponsored event geared to help Youth@Work and expressed these views and this work on helping is a much better use of resources than providing subsidies which I suspect is a palliative to the closet socialists in the Lib Dems. The price of placebos at £1bn a piece is high but to be fair this figure also includes better thought out band aids

  • guaranteed unpaid work placements to 18 to 24 year-olds after three months’ unemployment. Some 250,000 more places will become available by 2012, up from the current 100,000 – although this proposal relies on an increased desire from employers to offer the scheme. Is just another form of “cheap labour”?
  • A new £50m training program for “persistent” NEETS aged between 16 and 17 will also only pay training providers “by results” – once the young person has been in education or training for a set period of time – rather than upfront payments.
  • Young people who drop out of work experience or a subsidised job will lose their benefits. This is a good move.
  • Apprenticeship funding will be boosted, allowing for 20,000 more places – on top of the 400,000 places each year the Government hopes to create by the end of this parliament.

Obviously for any of this to work there has to be labour demand, the willingness of employers to go down this route and do battle with Job Centre inefficiencies that will erode the economic benefits but all of this is just plastering over systemic education failings.

As I have said many times before we don’t have a problem with unemployment but unemployable. It is a tragedy and will take a generation to solve but the first step is to stop the educational system producing second class citizens that  the business world doesn’t want or possibly need.


Author: Chris Slay

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