Nick Clegg has promised to focus on Tyneside’s youth unemployment as the region’s jobless total rises.
The deputy prime minister has announced a £50m Youth Contract fund, making available a £2,275 wage incentive payment to help meet the costs of taking on a young person and training them up.
Across the North East more than 51,000 young adults are out of work, while overall unemployment actually rose by 4,000 to 134,000 in the latest figures despite a national fall.
The Liberal Democrat leader has faced criticism for failing to reduce youth unemployment, though the MP insisted the situation is improving.
Mr Clegg said the £50m was just part of a £1bn scheme.
“The North East stands to benefit a great deal from this, a lot of money to take on an additional young unemployed person.
“We want to allow cities such as Newcastle to pilot innovative ideas themselves.
“We do need to recognise youth unemployment hot spots and that’s what we are doing here.
“Youth unemployment in the North East has fallen by 4,000 over the last few months, it is falling but yes it is still far too high.
“I’m aware, as a very regular visitor to the North East, of the particular challenges the region faces, and we are acting on that, though I think there is still far, far more that the private sector could do.”
He added that only a small fraction of companies took on apprentices at present, a situation he wished to reverse.
Newcastle was one of the eight ‘core cities’ who agreed a city deal with the Government focusing on economic growth.
As part of its city deal, it will be expected to set out what it can do with the money to get young adults into work. Other North East councils will have access to much of the rest of the £1bn fund.
Unions have questioned the Government’s commitment to tackling unemployment amid a rising problem in the North East.
Neil Foster, policy officer at the Northern TUC, said: “The Deputy Prime Minister’s Youth Contract has been an abysmal failure that has let down so many unemployed young people.
“We therefore welcome the opportunity for other partners to develop new approaches, but these really should not be confined to cities when the scourge of youth unemployment runs right across our region.
“Young people outside of cities also face the added burden of the costs of public transport and they risk being forgotten here.
“Sadly the resources outlined today will barely scratch the surface and given the scale of coalition cuts to careers services, it’s little wonder that so many young people don’t know where to turn to.
“Without the right funding, there is a danger here that the coalition is seen to pass the buck rather than resource local organisations to genuinely tackle youth unemployment in new and innovative ways.”