"Welfare-to-Work" Strategy For Youth

Four options will be available for young unemployed people:

• Private-sector job: employers will be offered a £60-a-week rebate for six months.

• Work with a non-profit voluntary sector employer: claimants will receive benefit plus a fixed sum for six months.

• Full-time study for young people who are unemployed: an abolition of the 16-hour rule which restricts the number of hours you can study when receiving benefits.

• A job with the environment taskforce, linked to Labour's Citizens' Service programme: claimants will receive benefit plus a fixed sum for six months.

In addition:

• All young people will be offered part-time or full-time education after the age of 16. Those aged 16-18 in a job will have the right to study on an approved course.

• The Youth Training scheme will be replaced by Target 2000. By the age of 18 all young people will be expected to have achieved NVQ level 2.

• Employers will be offered a £75-a-week tax rebate for six months if they take on an employee who has been unemployed for more than two years. This is to be funded by the windfall tax.

• A Jet Scheme to help lone parents back to work. Once the youngest child is in the second term of full-time school lone parents will be offered advice by a proactive Employment Service to develop a package of job search, training and after-school care.

• New Employment Zones will be created where personal job accounts will combine money currently available for benefits and training to offer claimants more options. Benefits, employment and career services will be co-ordinated.

• Phased release of receipts from council house sales will provide new jobs in the construction industry.

• Action against fraud will be maintained: initially targeting housing benefit fraud.

The windfall tax on the excess profits of the privatised utilities, which will be used to fund part of the "welfare-to-work" strategy, will be introduced as part of the Budget.

More than two-thirds of 16-year-olds stay on in further education, mostly at FE colleges. Only one in twelve starts work, and one in ten enters a training scheme. The number of young people staying on in further education has increased steadily since the mid-1970s due to a number of factors: the withdrawal (in 1988) of entitlement to benefit for 16- and 17-year-olds, job shortages and the lack of success of youth training programmes.

But there is still a significant problem of unemployment among young people:

• 718,000 16/24-year-olds are unemployed (autumn 1996): 19.6% of those aged 16-19 and 13.2% aged 20-24.

• The unemployment rate among young people is higher than any other age group.

• Over the last year (autumn 1995-autumn 1996) unemployment increased only in the 16-19 age group.

• 151,000 people aged 16-24 have been unemployed for one year or more.

• The level of compulsion: will young people have a genuine choice as to whether to take up any one of the four options offered?

• Will there be any guarantee of the quality of the jobs or training offered?

• Would the full minimum wage cover all those under 25?

• What happens to a young person after six months? If they continue to be unemployed, what sorts of benefits will they be entitled to? Will the Jobseekers' Allowance be retained?

• Will employment opportunities be sustained for young people who move into work following training or after a 6-month subsidised work placement? What will the Government do to encourage long-term employment opportunities and job growth?

Under the previous government, attempts to encourage young people leaving school to take up Youth Training (YT) though a Training Guarantee were largely unsuccessful because there were not enough places - mainly because the scheme was underfunded. The training offered under YT has also been criticised. Youthaid found that half of young people on YT left the scheme early, one in three failed to achieve NVQ level 2 and about 40% of leavers became unemployed.

Young people will be guaranteed access to the proposed Target 2000 scheme, in a similar way that young people were offered a Training Guarantee under the previous government. Increased resources will be needed to ensure sufficient places to meet demand. Concern has already been expressed by some campaign organisations that there will be no safety net - those who do not take up training or work will not be entitled to any support.

The level of employment among lone parents is low: 16% of them work full-time and 24% work part-time. Employment rates actually decreased among lone mothers during the 1980s, contrary to trends in employment among other women. The reasons for the low level of employment among lone parents has been attributed to the lack of affordable childcare, the way in which the means-tested benefits system works and the high cost of housing.

The likelihood of lone parents working full-time increases substantially when their children reach school age: 22% of lone parents with children aged 5+ work full time compared to 9% of those with children under 5. Currently lone parents are not required to sign on until their children reach the age of 16. Requiring lone parents to sign-on when their child is of school age could mean loss of benefit unless they are deemed to be actively seeking work. The availability of after-school childcare, help with the costs of seeking work and the offer of training will be crucial.

The integration of benefits, employment and career services could reduce bureaucracy surrounding the claiming of unemployment. The creation of personal job accounts has no precedent - which raises many questions:

• What kind of options will be offered to claimants?

• Who will make decisions about the options that are available? If these are set locally, will there be significant regional differences? Will claimants be able to refuse options without penalty?

• How much money will be available to offer claimants genuine choices? Both Conservative and Labour MPs have recognised that benefit levels are meagre. Means-tested unemployment benefits are widely assumed to be set to the minimum required to live on.

Estimates of the level benefit fraud are, at best, guesses. The DSS estimates £3 billion worth of benefit fraud takes place each year, of which £2 billion is housing benefit fraud. This includes everything from organised group fraud to inadvertent errors made on the part of the claimant or the Benefits Agency.

The level of unclaimed benefit is equivalent to that of the estimated level of fraud: between £2.2 billion and £3.5 billion in means-tested benefits each year.

Recent measures to clamp down on fraud include the Benefit Fraud Hotline, launched in summer 1996, which gets around 1,500 calls a day. The 1997 Fraud Bill contained various measures to increase powers of local authorities to investigate fraud and raised the penalties for committing benefit fraud.