Work and Pensions Secretary Pat McFadden is set to announce a £1 billion employment initiative on Monday, targeting the rising number of young people classified as “Neets“, those not in education, employment, or training. The package represents one of the most significant government interventions in youth employment in recent years, combining direct financial incentives for employers with an expansion of existing job guarantee programs.
The announcement comes as policymakers grow increasingly concerned about the trajectory of youth unemployment under current economic conditions. Prime Minister Sir Keir Starmer has framed the initiative as central to his government’s broader economic ambitions, stating his administration is “determined to tackle the rise in youth unemployment by expanding practical routes into work, boosting apprenticeships, and giving employers the clarity they need.”
What the Package Contains
At the heart of the initiative is a new Youth Jobs Grant, which will offer businesses £3,000 for each 18-to-24-year-old hired who has been out of work for six months or more. According to the government, the grant is expected to support around 60,000 individuals. Alongside this, small and medium-sized businesses will receive £2,000 for every new apprentice aged 16 to 24 they take on, a measure designed to make hiring younger workers more financially viable for employers who may otherwise hesitate.
The government is also expanding its existing jobs guarantee scheme, which previously offered a six-month employment placement to Universal Credit claimants who had been out of work for 18 months. That program will now extend its eligibility to cover individuals up to the age of 24, widening the safety net for a demographic particularly vulnerable to long-term unemployment. McFadden described the measures as offering “life-changing opportunities,” adding that the reforms would “give young people a vital first step on the career ladder and help business leaders recruit the talent that will grow their companies.”
Political Divisions Over the Approach
The plan has attracted notable support from outside Westminster. Michelin-starred chef Tom Kerridge, who has employed apprentices across his restaurants, welcomed the incentives, saying the measures would give the hospitality industry “a great boost.” His endorsement points to the government’s effort to build a broad coalition behind the initiative, drawing in voices from sectors where youth employment has historically been both plentiful and precarious.
Not everyone, however, is convinced. The Conservative opposition has argued that the government’s own policies are undermining the very job market it now claims to be fixing. Shadow Work and Pensions Secretary Helen Whately pointed to the Employment Rights Act and increased national insurance contributions as key factors in shrinking opportunities for young workers.
According to Whately, “the best way to tackle youth unemployment is to back businesses to create jobs, not tax them out of existence to fund benefits and subsidies.” The Conservatives have proposed cutting business rates and rolling back the Employment Rights Act as alternative measures.
