MASS youth unemployment is here to stay across the region without more Government help, a report by a committee of MPs warns today.

The £1bn Youth Contract – offering wage subsidies, apprenticeships grants and work experience places – is described as “welcome but not enough”, amid growing fears of a lost generation.

Incentives may be too low, the scheme is unlikely to reach many jobless young people and too much money will be spent in more-prosperous South, the work and pensions committee found.

Unlike the Future Jobs Fund, axed when the coalition Government came to power, it does not provide subsidised employment, the MPs said, merely encouragement to employers to “give young people a chance”.

Dame Anne Begg, committee’s chairwoman, said: “The Youth Contract is welcome but, on its own, it will not be enough to address the current unacceptably high level of youth unemployment.”

The harsh background is a huge leap in the number of Neets – 16 to 18-year-olds not in education, employment or training – as Britain’s economic slump has worsened.

Across the North-East and North Yorkshire, the total soared from 6,870 in 2010 to 8,350 at the end of last year – a rise of nearly 18 per cent.

Meanwhile, the proportion of young people on the dole in the North-East (11.5 per cent) is more than twice that in the South-East (5.5 per cent).

The crisis prompted Deputy Prime Minister Nick Clegg to unveil the Youth Contract late last year, the centrepiece of which is a £2,275 payment to firms to take on 160,000 18 to 24-year-olds.

Also promised were an extra 250,000 work experience places, more incentives to take on apprentices and help to get 25,000 Neets back to school or college.

But today’s report raises a series of problems: 􀁥 Take-up will be much higher in areas of the South, with more jobs – unless ministers impose regional caps.

􀁥 The £2,275 incentive payment to employers will be too low where youth employment is most depressed.

􀁥 Funds given to large firms as prime contractors will fail to reach smaller organisations offering help to Neets “on the ground”.

􀁥 The maximum payment – of £2,200 per Neet – is “too low to enable delivery of the intensive interventions often required”.

􀁥 Unpaid work experience is “counter-productive” for people with experience and relatively good employment prospects.