Mr. James Higgins:

I am glad to be here. I will give some European context to the debate. On 28 February, the Employment, Social Policy, Health and Consumer Affairs Council, EPSCO, approved a recommendation for a youth guarantee. This directly followed the European Commission proposal as part of its youth employment package at the end of last year. The Council recommended that member states begin to implement the scheme as soon as possible and preferably from the start of 2014. I will provide some rationale behind the scheme. Mr. Doorley said it is based on a Nordic model of early labour market activation measures which have been in operation in some ways since the 1980s. Sweden first introduced the job guarantee, as it was termed, in 1984. It was followed shortly afterwards by other Scandinavian countries, including Finland. There have been many reworkings of these schemes since they were first introduced and there is a good deal that European member states can learn from the way these countries have had to adapt and change schemes to allow for the way the labour market has changed, specifically with regard to young people.

One significant element of the Commission's proposal was the idea that youth organisations and the representatives of young people should be involved in the design and implementation of the scheme. The reason for this, as Mr. Doorley remarked, is that it is difficult, unfortunately, to reach long-term unemployed young people because of some of the issues of social exclusion that arise for them. Often, it requires civil society organisations to intervene.

One major advantage of the youth guarantee, in the way it has been implemented in the Nordic model, is that it prevents the onset of long-term unemployment when it is implemented correctly. Unfortunately, statistics show that long-term unemployment is growing in Europe as a whole. It has increased by 3.7% since 2008 and it is increasing at a rate higher than the adult rate of long-term unemployment. This is almost unheard of considering that young people usually do not fall into long-term unemployment in the same way as older people.

I will outline the way it has been implemented in Sweden and Denmark. As Mr. Doorley remarked, the programme costs approximately €6,600 per participant under the Swedish model and there is considerable popularity for the scheme there. In 2008, approximately 10,000 young people were participating in the scheme in Sweden and that figure is currently at 53,000.

The implementation of the youth guarantee in the short term places a large strain on public employment services. There needs to be a reorientation of public employment services in some ways towards the uptake from young people. I will offer one example. In Finland in 2009, due to an increased demand from young people, there was only one youth adviser for every 700 young people participating in the scheme. Therefore, Finland had to invest radically in the scheme, but it had a good deal of success. In 2010, Finland put more public expenditure towards it and there was successful intervention for 83.5% of young people participating. This meant they got some form of training or a job within the three months in Finland.

Although a lot can be said about the cost, one of the reasons it has remained popular in the Nordic countries is that in the medium to long term, it not only saves money but there is a net profit per participant. As Mr. James Dooley mentioned, it costs approximately €6,600 for young people. However, a Swedish report produced in 2010 found that the state tends to recoup the amount of money it has invested within one year. After the one-year period, the average net gain per participant in the scheme is just over €4,000. The short-term investment produces a long-term gain especially in terms of preventing young people from falling into long-term unemployment.

A total of €6 billion funding has been earmarked by the European Union under the MFF over a six-year period, based on the €21 billion recommended by the ILO, which equates to about 0.5% of eurozone expenditure. Even if this money was to be matched by member states, it would still be insufficient to implement the scheme fully. As we have seen from the way it has been implemented before, if there is not sufficient investment the services often become over-burdened and the scheme will not work to the same extent.