The Forum of Private Business is cautiously welcoming a government initiative to expand work experience for young unemployed people – but warning more needs to be done to review the quality of training they receive and free apprenticeships and work placements from red tape.

The new scheme will increase the time individuals aged between 18 and 21 are allowed to do work experience without the risk of losing benefits from two to eight weeks.

In addition, specialist staff at Jobcentre Plus will now be responsible for matching young people looking for work with employers offering work experience placements.

The scheme was announced today by Employment Minister Chris Grayling ahead of a summit on skills and employment being held by the Department of Work and Pensions (DWP) tomorrow.

The Forum’s Chief Executive, Phil Orford, who is attending the meeting, called for a ‘holistic’ approach to tackling youth unemployment.

“This is an important and welcome scheme to improve and expand work experience,” said Mr Orford. “If small businesses in the private sector are to lead job creation and tackle unemployment they need a better labour market that includes young, ambitious and talented individuals who know what it takes to thrive in the world of work,” said Mr Orford.

“But we must ensure that processes are in place to monitor the effectiveness of the training provided so that our young people are given the best opportunities possible – we don’t want them to be left sweeping up or just making the tea.”

He added: “Further, we know that there are significant barriers to creating permanent jobs, apprenticeships and work placements as a direct result of the tax system and red tape.

“As part of a more holistic approach to youth unemployment and job creation, simplifying tax and reducing regulation is vital in order to free employers to build better pathways to the workplace for young people on benefits or in the education system.”

According to the latest official figures released last week unemployment has risen dramatically, particularly among young people.

The total number of people under 25 who are out of work increased by 32,000 to 951,000 in the three months to November – at 20.3 per cent the highest unemployment rate for 20 years.

Among those aged 16 to 17 total numbers rose by 27,000 in the same period.

In the Forum’s latest tax and budget member panel survey, published in January, 78 per cent of small businesses said the tax system is a barrier to taking on new staff and 57 per cent called for it to be improved significantly to allow them to create jobs.

More than one in five (22 per cent) believe that using subcontractors is a more flexible, cost-effective solution to staffing shortages than direct employment.

Small businesses surveyed in the Forum’s Employment Law member panel in may 2010 fear the complexity of redundancy and disciplinary procedures will reduce opportunities for young people.

They believe that the imminent abolition of the Default Retirement Age (DRA) will effectively end traditional apprenticeships because they will no longer be able to operate the established process of retiring tradesmen training up young replacements as effectively as in previous years.