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Good point made by the Conservative MP Graham Stuart at last week's Liason Committee meeting with the Prime Minister.

Here is the exchange:

Mr Stuart: In Holland, benefits to young people are paid by municipalities. If they spend less than the money they are allocated by the Government, they get to keep it, and if they spend more, they have to pay the price. Since that legislation was brought in, it has transformed the attitude and approach of municipalities, because rather than just processing young people-putting in the claim to the centre-they have focused much harder on making sure that people get work. In fact, up to the age of 27, you cannot get benefits unless you are in work or training. Are there changes that we can bring about to the incentives system in this country that can lead us to join the Dutch in having the lowest number of unemployed young people in the OECD?

Mr Cameron: I will certainly look at what the Dutch are doing. What our plans have in common with theirs is that the universal credit system-because it basically works right from the bottom of the income scale and the fewest number of hours worked, all the way up-means that however few hours you are working, working a little bit more will always mean you keep a bit more income. Because it basically interacts between the benefits system and what you are getting in work, I think it will be an enormous incentive.

Should we do more to try and localise some of this problem, as they have done in Holland? When we have given county councils-Kent, for instance-the chance to run more services, including some welfare services, they have found it in their interest really to get to grips with welfare bills and costs, because they know they will have to pick up all the costs further down the line. It is an interesting agenda, but I will certainly study what the Dutch do.

 

5 comments for: How localism could cut youth unemployment

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