The Government’s flagship scheme to get young people back into work is being wound up a month early after failing to help more than a fraction of those it targeted.
Businesses have been told a deadline for applications for wage incentives under the “Youth Contract” initiative has been brought forward to August, the Financial Times reported.
Officials said falling youth unemployment meant the cash could be better targeted towards those struggling most to find work, including black and ethnic minority teenagers.
But Labour seized on the move as proof the high-profile push championed by Deputy Prime Minister Nick Clegg had been an “abject failure”.
At its launch in 2012, Mr Clegg said enough money was available to allow 160,000 under 25s to be given a six-month “job start” by firms taking advantage of a £2,275 state subsidy.
But the most recent statistics show that by November last year wage-incentive payments had been made in respect of only just over 10,000 individuals.
Critics say many of those were for jobs that would have been created without the subsidy.
Fewer than half of the 500,000 young people Mr Clegg said the wider scheme would help – through training, work experience and interviews – have benefited.
The Government said the low take-up was a symptom of continued falls in youth unemployment – with the latest figures showing it went down by 141,000 in the last year.
It made sense to divert resources to ” more targeted projects to support the young people with the most barriers to work”, it said.
That will include intensive Jobcentre Plus support for 18 and 19-year-olds from black and minority ethnic and education and help for those not in employment, education or training (NEETs).
A Government spokeswoman said: “We now have record employment in this country, with the largest fall in youth unemployment since the 1980s.
“The Youth Contract has contributed to that by providing over 200,000 opportunities for young people, helping them to get the experience and training they need.
“As part of the Government’s long-term economic plan, we’ll be re-investing the wage incentive money in other projects targeted at those young people who face the biggest challenges to getting into work, so everyone can share in the growing economy and improving jobs market.”
But shadow work and pensions secretary Rachel Reeves said: ” The Youth Contract has been an abject failure from start to finish.
“Ministers promised it would get every unemployed young person working or learning, but only a tiny fraction of Youth Contract employer wage incentives were ever used to get young people into work, and over 800,000 young people are still unemployed.
“The Government should introduce Labour’s Compulsory Jobs Guarantee to get young jobseekers off benefits and into work.”
Local government leaders have consistently called for resources to be switched to locally-run schemes, arguing that they have proved far more effective.
The Youth Contract was also dismissed as “not sufficient” by Laszlo Andor, the then European Commissioner responsible for employment.