A £2 BILLION package of taxpayer-funded work placements for young people claiming benefits has been hailed as a “positive” step towards avoiding a youth employment crisis.

Chancellor Rishi Sunak unveiled the funding for placements, which will be offered to people aged between 16 and 24 at risk of long-term unemployment, in Parliament yesterday.

The measure is part of the Chancellor’s “plan for jobs”, which could cost up to £30 billion.

Read more about the Chancellor's plans here

Under a jobs retention bonus, firms will be paid £1,000 for each employee they bring back from furlough and continuously employ through to January on an average of at least £520 a month.

David Burch, director of policy at Essex Chamber of Commerce, said younger employees, particularly in the rebooting hospitality sector, had been most at risk during the coronavirus pandemic.

He welcomed any move to provide struggling youngsters with a chance to get their “foot on the career ladder”.

“The evidence suggests that younger employees are the most likely to potentially lose their jobs and I think we are going to have to be honest and accept there will be job losses,” he said.

“Businesses shut down very quickly when the Government asked them to back in March, some people have been able to work from home, while others have not had that option.

“Some have been put on short-term working, while quite a lot have been furloughed.

“There is a fear the economy is not going to kick into life, it isn’t like flicking a switch and turning a light back on - it will take time to get businesses back up and running again.

“We have seen it in the hospitality sector, where the measures businesses must take and the restraints they face to comply with government regulations mean their capacity is going to be lower.

“Therefore, they are going to have to look at making savings.

“Quite often, in that sector, it is younger people who are going to be made redundant.”

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Mr Sunak also unveiled a £111 million programme of unpaid traineeships, which combine work experience with training.

“On a national level we lobbied on wanting to see work experience and job opportunities produced to help get these people back into work,” said Mr Burch.

“Offering placements for this age group is good, it helps people get onto the career ladder.

“The devil is always in the detail, but on balance it can only be a good move.

“The Government now has to do everything it can to rebuild the confidence of the public, so people feel safe going out to the shops, so they feel safe going back to work.

“It must help get businesses back up and running, even if it will take several months for that to happen.”