Deputy Prime Minister Nick Clegg has unveiled the “Youth Contract”, which is a scheme to get 16- and 17-year-olds who are out of work and not in education or work back into learning.

As part of the Youth Contract scheme, the Coalition Government will, for the first time, target funding to this group of teenagers through tailored support on a payment-by-results system.

Help will focus on at least 55,000 young people, those 16- and 17-year-old NEETs (Not in Education, Employment or Training) with no GCSEs at A* – C who are at the highest risk of long term disengagement.

In England, the Government is making £126m of new money available to give teenagers opportunities to train, work and get their lives on track, and N E Lincs is to receive £570,000 as it’s share of the funding for this scheme.

Charities and businesses with experience of supporting young people are being invited to bid for contracts worth up to £2,200 for every young person they help. The support will be tailored to match individuals’ needs, and will include basic skills training and interview practice.

Unlike any past schemes for this age group, payment will depend on results. Organisations will receive an initial payment for taking young people on, followed by subsequent payments when they show progress, which will include sticking with training programmes, undertaking apprenticeships, or holding down jobs. In order achieve the best results, the scheme will give total freedom to those providing support, as long as it produces success for the young person.

Disengaged 16- and 17-year-olds are chosen for special funding because of strong evidence that unemployment in early life can leave a permanent scar on earning potential, with the effects on their careers still evident decades later. By the age of 42, someone who had frequent periods of unemployment in their teens is likely to earn 12-15% less than their peers.

Announcing the funding at the Groundwork Hub in south east London, the Deputy Prime Minister said:

“Sitting at home with nothing to do when you’re so young can knock the stuffing out of you for years. It is a tragedy for the young people involved – a ticking time bomb for the economy and our society as a whole. This problem isn’t new, but in the current economic climate we urgently need to step up efforts to ensure some of our most troubled teenagers have the skills, confidence and opportunities to succeed.

“Many of them will have complex problems: truancy, teenage pregnancy, a lack of GCSEs and health problems. So helping them onto their feet will not be without challenges and Government cannot do this alone. But we all have a duty to reach out to the young people who can be hardest to reach. That’s why today I am calling on charities and other organisations at the coal face to work with Government to help tens and thousands of lost teenagers onto a brighter path.”

Funding will be awarded to organisations across England with a proven track record in getting young people into work, apprenticeships, or training.

Local authorities will be the key to the success of the programme. They will work with successful providers to target the young people in their area who will benefit most, fitting this programme with other provision on offer locally.

Payment-by-results will allow the charities to do what they know works for young people. Tightly controlled schemes have been found to be less effective and have lower success rates. The package of support offered will be encouraged to be innovative, to use new methods, to do what is right to ensure 16- or 17-year-old start earning or learning again.