Civic leaders have reacted with fury to news the Government has axed an scheme instrumental in turning around the city's youth employment crisis.
The Department for Work and Pensions has been accused of delivering a 'slap in the face' to unemployed youngsters after withdrawing the Wage Incentive Scheme, which has supported the employment of 1,336 young people.
Meanwhile, youth unemployment in Birmingham has fallen from 14,000 in 2012 to about 8,000 because of initiatives like this.
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The Government funding was combined with cash from the community chest and the National Apprenticeship Service to form the Birmingham Jobs Fund, which saw small and medium-sized employers receive a grant for taking on 18 to 24 year olds.
Payments were set at £3,000 for apprentices and £4,550 for non-apprentices who had been out of work for six months.
But council bosses are fuming after being given just a few days' notice that the Government scheme was being cancelled as they believe they could help at least another 1,500 youngsters into employment.
Council cabinet member for jobs Coun Tahir Ali said the council was now considering a judicial review as it only found out about the change from a third party sub-contractor two weeks before the Wage Incentive Scheme was cancelled. There was no consultation with the council or employers.
Coun Ali (Lab Nechells) said: "It is a real slap in the face for our young people. For me every young person out of work is one too many, but this government obviously believes that 8,000 is an acceptable level of unemployment and it no longer needs to intervene."
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He said the council had built up partnerships with colleges, employers, business groups and Department for Work and Pensions staff to promote the Birmingham Jobs Fund and support it and that by the sudden withdrawal, the Government had shown these organisations and the city council ‘a lack of respect'.
He explained the fund had attracted interest from employers which previously had not responded to the apprenticeship agenda.
Coun Ali has written to Secretary of State Iain Duncan Smith and Employment Minister Esther McVey calling for the fund to be reinstated and highlighted the lack of communication from government.
Coun Ali said: "It is extremely disappointing that the government has gone ahead with this current cut in funding for Birmingham, without any consultation, particularly when we were starting to see positive results in our drive to combat youth unemployment.
"I believe that our actions to address unemployment now, are better than promises to do something in the future.
"We remain committed to continuing this positive work, so we will be prioritising our resources to ensure that those most in need continue to receive the support they require to get into sustainable employment."
He said the grants would continue at the lower rates of £1,500 for apprentices and £2,250 for non-apprentices and eligibility widened to take in youngsters from inner-city wards who have been out of work for less than six months.
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The target remains to find work for a further 1,500 18 to 24 year olds.
In reply, Ms McVey insisted the Government was still operating a number of programmes to support young people in work, including Employment Allowance, which cuts the National Insurance requirement by £2,000.
The Government also plans to abolish National Insurance contributions for young people earning up to £42,285 from next year, she said.
She also highlighted the apprenticeship service grant, which is already a fundamental element of the Birmingham Jobs Fund.
A Department for Work and Pensions spokesman said: "We have just seen the largest annual fall in youth unemployment since records began in 1984 and there are now fewer young people claiming Jobseeker's Allowance than just before the recession.
"The Youth Contract has contributed to that by providing over 200,000 opportunities for young people, helping them to get the experience and training they need.
"As part of the Government's long-term economic plan, we'll be re-investing the wage incentive money in other projects targeted at those young people who face the biggest challenges to getting into work, so everyone can share in the growing economy and improving jobs market."