Nick Clegg should be congratulated for doing the right thing by reviving the Future Jobs
Fund and the Young Person’s Guarantee, for that is what the Youth Contract is in all but name.

This is, of course, another U-turn. As Chris Bryant tweeted rather brutally after Clegg’s announcement, if the government wanted to save young people from the scrapheap, why did it put them
there in the first place. It never made sense to abolish the Future Jobs Fund without putting anything in its place and ministers never sounded convinced when they said the Work Programme would
deliver for young people.

It is to the eternal credit of Clegg and those around him that they realised a job subsidy was an essential intervention in a stagnant jobs market. This is not easy to stomach for those who
believed the market would eventually provide the solutions — not least Iain Duncan Smith and Chris Grayling who until now have stubbornly stuck to the line that the Work Programme would
deliver for young people.

Why and how did Clegg see the light? Part of it was political: a recognition that the Coalition was being hit hard by Labour’s ‘lost generation’ rhetoric. But they also chose to
listen, taking soundings from those in the third sector who knew what they were talking about on this issue (something Conservative ministers in the Department for Work and Pensions and elsewhere
in government could learn from).

The new system will provide a job subsidy of £2,275 (i.e. half of the amount on the original scheme), and we will have to see if this is enough of an incentive to employers. It also turns out
the scheme will be delivered by the ‘prime contractors‘ such as Serco, G4S and A4e who are already at full stretch delivering the Work Programme.

We are not out of the woods yet, but this could turn out to be an example of good old-fashioned Lib Dem compromise, saving the Coalition from its more ideological instincts.