The government last week unveiled a £1bn scheme to tackle youth unemployment through subsidies, apprenticeships and work experience placements for 500,000 jobless young people. In addition, a new £50m programme aims to get 25,000 of the most disadvantaged 16- to 17-year-olds in England on to an apprenticeship or into work. The announcement came as figures showed that almost one in five 16- to 24-year-olds are not in education, employment or training (neets). The 137,000 increase in neets over the last year to 1,163,000 is the highest since records began.

At the same time, there has been an explosion of new businesses in one area of the country. A year on from David Cameron’s announcement to make London’s East End the new Silicon Valley, there are now more than 600 hi-tech firms around the “Silicon Roundabout”, compared with 200 in 2010.
Building on the existing cluster of technology companies, the Tech City initiative is seen by the government as the key to Britain’s hi-tech future, bringing much needed investment and jobs to some of the most deprived communities in the UK. But can it really benefit neets living locally?

The IT employment sector is growing five times faster than the UK average. Some 500,000 new entrants will be needed in the next five years, but most of these jobs – research analysts, software developers, infrastructure specialists, systems engineers – will demand higher level qualifications and skills than exist among the resident population.

There are real opportunities, particularly for young people who are increasingly under-represented in the IT sector. Educational performance will need to radically transform to provide the calibre of entrants required. An overhaul of the Information and Communication Technology (ICT) curriculum is required. It is hoped that Behind the Screen, an industry-funded trial of a new computing curriculum, will help to achieve this. Co-opting tech companies on to school governing bodies would promote the sector to young people.
Apprenticeships are a key entry route for the more vocational and semi-skilled technical roles. But few apprentices are being taken up by neets. The government’s youth scheme will subsidise 160,000 work places by providing £2,275 for six months to any private business willing to hire an unemployed 18- to 24-year-old. This is welcome but wage subsidy measures must focus on firms with the potential for growth and payments related to sustained outcomes. A short-term subsidy could act as an incentive for a small employer to progress a youngster into a full apprenticeship.

If the government is to play a leading role in helping to bring hi-tech jobs to a low skilled population it must work more closely with business to ensure employment and skills meet their workforce needs.

• Mark Morrin is an economic development consultant specialising in employment and skills policy