Birmingham City Council responds to Wage Incentive cut

By on 30/09/2014 in Cllr Ali, News

Birmingham City Council has drawn up plans to ensure that unemployed young people continue to be supported into work following the withdrawal of the Government's Wage Incentive Scheme.

The scheme, which bolstered the council's Birmingham Jobs Fund 'offer to employers' who took on young people in either apprentice or non-apprentice roles, was withdrawn by the Department for Work and Pensions (DWP) on 6 August.

Two of Birmingham City Council's cabinet members are now being asked to approve changes to the Birmingham Jobs Fund to ensure that the necessary support continues to be available to those who need it the most.

A report to Cllr Tahir Ali, Cabinet Member for Development, Transport and the Economy, and Cllr Penny Holbrook, Cabinet Member for Skills, Learning and Culture, recommends that they agree to maintain the existing non-apprentice incentive of £2,275 on the basis that employers are already familiar with this offer and that reducing it would impact on the council's ability to support a further 1,500 people into employment.

They are also being asked to agree that the incentive for apprentices should now be capped at £1,500. Previously, where an employer was not eligible for the National Apprenticeship Service AGE grant, Birmingham Jobs Fund would make up the gap by paying the full £3,000.

The report also proposes piloting a scheme where the eligibility period for the incentive for non-apprentices is reduced from six months to the first day of their Jobseekers Allowance claim for those living in the seven Birmingham wards with the greatest number of unemployed young people - Sparkbrook, Bordesley Green, Washwood Heath, Aston, Nechells, Soho, and Lozells and East Handsworth.

For those living outside these areas, it is proposed to reduce the six-month period to 12 weeks. The apprenticeship eligibility criteria will remain unchanged.

Cllr Ali said: “While I note that the Prime Minister has pledged to cap benefits to fund more apprenticeships should his party remain in Government after the next General Election, it is still extremely disappointing that the Government has gone ahead with this current cut in funding for Birmingham, without any consultation, particularly when we were starting to see positive results in our drive to combat youth unemployment.

“I believe that our actions to address unemployment now, are better than promises to do something in the future. We remain committed to continuing this positive work, so we will be prioritising our resources to ensure that those most in need continue to receive the support they require to get into sustainable employment.”

Cllr Holbrook said: “The aim of these changes is to ensure that the Birmingham Jobs Fund continues to have the maximum impact for employers and their potential employees alike.

“By varying the level of incentives available to employers, we can also ensure that the Birmingham Jobs Fund maintains its target of delivering 1,500 young people into jobs and apprenticeship opportunities.”


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