In response to youth unemployment hitting one million people last year, the government launched its youth contract, which offered businesses a subsidy of up to £2,275 for employing an under-25 year old who had been out of work for at least six months.
It was designed to help around 53,000 people each year, but figures released yesterday showed fewer than 4,700 were still in work after six months.
More had started work: 21,000 have found a way into the workplace, suggesting that many are struggling to keep their jobs.
The first year figures will disappoint the government, which announced a review of its young people's employment programmes last week, perhaps in anticipation of the youth contract underachievement.
Youth unemployment has fallen since the introduction of the scheme, but this is likely to be coincidental given its poor performance.
A Conservative source within the Department for Work and Pensions told The Guardian the youth contract was the brainchild of the Liberal Democrat leader:
"It is no secret that this is something Nick Clegg was very keen on. For one reason or another, there has been very little take-up. It may be small employers are saying that they have no need to take on someone who has been unemployed for more than six months.
"We have done everything possible to reduce the bureaucracy involved with the scheme and to publicise it, but these figures are disappointing."
Mike Cherry, national policy chairman for the Federation of Small Businesses, said: "[Our] research found that a wage subsidy is the single most important thing the government can do get small firms to take on more employees.
"Small businesses are committed to employing young people where possible and wage incentives can make a difference. More can always be done to make small businesses aware of the support that is available to them, and the FSB will play its part in doing so."
Money not spent through the youth contract will be put into other employment schemes for young people, but the government has released no information on these changes to date with its current review to decide this.
The shadow work and pensions secretary, Liam Byrne, said: "The youth contract has utterly failed to get our young people back to work. This flagship scheme is on course to miss its target by more than 92% – no wonder there are still almost a million young people out of work."