Announced earlier this week by Deputy Prime Minister Nick Clegg, the scheme will target young people through tailored support from charities and businesses on a payment-by-results basis.

Through focusing on this age group, the scheme will help to tackle the issue of pre-Apprenticeship provision, with many NEETS currently leaving school without the qualifications needed to meet the standards that employers set for people looking to start an Apprenticeship.

Announcing the plans, Clegg said: “Sitting at home with nothing to do when you're so young can knock the stuffing out of you for years. It is a tragedy for the young people involved - a ticking time bomb for the economy and our society as a whole.

“This problem isn't new, but in the current economic climate we urgently need to step up efforts to ensure some of our most troubled teenagers have the skills, confidence and opportunities to succeed.”

AELP chief executive Graham Hoyle spoke of his organisation’s relief at the announcement of the plans. He said: "This is what AELP has been pressing for over many months since it became apparent that youth unemployment was on the increase.

“We are pleased that the DfE has listened to our calls that their NEET programmes should offer training providers maximum flexibility in offering personalised solutions to individuals to overcome the barriers that prevent them from securing a job or further learning.”

Introduced as part of the Deputy Prime Minister’s Youth Contract programme, launched in November 2011, organisations with a track-record in supporting young people will be invited to bid for contracts worth up to £2,200 for every young person they help.

Unlike past schemes for this age group, payment will depend on results - organisations will receive an initial payment for taking a young person on, followed by subsequent payments when they show progress, which could be demonstrated by remaining in education, undertaking Apprenticeships, or holding down a job.

CBI director for employment and skills policy Neil Carberry said that despite the announcement being a step forward, there is concern that the programme does not go far enough to help young people.

He said: “We still need to see urgent action in schools to minimise the risk of young people becoming ‘NEETs’ in the first place, through better careers and study advice and improved business-school links.

“It is right that private and third-sector providers are tasked with delivering this initiative on a payment-by-results basis, but they will need to work closely with local authorities, schools and other public agencies to make sure the scheme delivers.”

The scheme follows the introduction of the Access to Apprenticeships programme in August 2011, which aims to widen the access of young people to Apprenticeships.

The Young People’s Learning Agency (YPLA) will be responsible for awarding the contracts for the programme in England and organisations are now being invited to tender.

Linsey Humphries