The UK government is set to roll out a new employment scheme offering grants to companies that take on unemployed young people, in a bid to tackle stubbornly high youth joblessness and kickstart careers stalled by economic uncertainty.
Companies will be paid £3,000 to hire some unemployed under‑24s
The government will give firms a £3,000 grant for every 18 to 24-year-old they hire who is on benefits and has been looking for work for six months or more.
The new “youth jobs grants” are expected to support around 60,000 young people into work over the next three years, although ministers have not yet detailed the exact criteria employers must meet to qualify.
This announcement comes amid what ministers describe as an unemployment crisis among young people, with more than 950,000 16 to 24-year-olds not in education, employment or training – around one in eight of all people in that age group.
Work and Pensions Secretary Pat McFadden called the problem “deep rooted”, arguing that youth unemployment had already been rising in the years before Labour came into office.
Labour is widening an existing jobs guarantee scheme
Alongside the new grants, Labour is widening an existing jobs guarantee scheme that subsidises six-month minimum wage roles for long‑term unemployed benefit claimants.
Currently, this support is focused on 18 to 21-year-olds who have been out of work for 18 months, but from the autumn the upper age limit will rise to 24, bringing more older young people into scope.
Taken together, the youth jobs grants and the expanded guarantee are part of a £1bn drive that the government says will help create up to 200,000 jobs for young people over three years.
The intention is to ease the financial risk for employers while giving young people paid experience rather than leaving them parked on benefits.
Government-funded foundation apprenticeships will open more entry-level roles
Ministers are also reshaping apprenticeships to push opportunities towards younger workers.
Government-funded foundation apprenticeships where employers can receive up to £2,000 in instalments will expand into sectors such as hospitality and retail from April, opening up more entry-level roles.
At the same time, some management apprenticeships, typically taken by people over 25, are being scrapped so funding can be diverted into new courses in areas like AI leadership and electric vehicle charging point installation.
This reflects a broader attempt to align training with emerging sectors and ensure that limited apprenticeship funding is tilted back towards 16–24-year-olds.
Former New Labour cabinet minister Alan Milburn has been appointed to lead an official review into youth unemployment, examining the structural causes of high inactivity among 16 to 24-year-olds.
His conclusions, due in the summer, are expected to influence whether the current measures are expanded, reshaped or replaced.
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