Government has announced a ‘major youth employment drive backed by £1 billion’ to ‘help create 200,000 jobs for young people’, alongside the ‘biggest transformation of apprenticeships in a decade’.
The Department for Work and Pensions writes:
- Major employment drive – backed by large and small businesses and celebrity chef Tom Kerridge – will reverse rising number of young people neither earning nor learning, after a 37 percent increase between 2021 and 2024.
- Additional £1 billion to be invested in grants to help unlock over 200,000 paid jobs for young people, with Jobs Guarantee to be expanded to ages 18-24.
- New foundation apprenticeships in hospitality and retail, with up to £2,000 for employers to support 16-21-year-olds into work.
A major youth employment drive backed by £1 billion will help create 200,000 jobs for young people, alongside the biggest transformation of apprenticeships in a decade. It comes as apprenticeships starts amongst young people are down 40 percent in the last decade and almost one million young people are not earning or learning – a rise of 248,000 between 2021-2024.
In a speech by Work and Pensions Secretary Pat McFadden at Waltham Forest College today, a ‘New Deal’ for young people includes:
- A new Youth Jobs Grant, through which businesses will receive £3,000 for every young person they hire aged 18-24 who has been on UC and looking for work for six months. This is expected to support 60,000 young people over three years.
- Expansion of the Jobs Guarantee to a wider age range, from 18-21 to 18-24, to create more than 35,000 extra subsidised jobs. This brings the total to be supported through the scheme to over 90,000 in the next three years.
- An Apprenticeship Incentive of £2,000 for each new employee aged 16-24 taken on by an SME. As part of wider reforms, this will drive progress to our target of creating 50,000 more apprenticeships.
- Further reforms to the Growth and Skills Levy to prioritise young apprentices, secure value for money and give school and college leavers more opportunities than ever to build careers in cutting edge industries.
It is the latest step in the Government’s commitment to ensuring every young person aged 16-24 has the opportunity to earn or learn. These changes are backed by an additional £1bn, taking the total investment into the Youth Guarantee and the additional investment in the Growth and Skills Levy to £2.5 billion over the next three years. This will support almost one million young people and help deliver up to 500,000 opportunities to earn and learn.
Prime Minister Sir Keir Starmer said: ‘Backing young people is one of the most important investments we can make in this country’s future. We are determined to tackle the rise in youth unemployment by expanding practical routes into work, boosting apprenticeships, and giving employers the clarity they need. These reforms underpin our ambition to create an economy that works for everyone, closing the skills gap and supporting more young people into meaningful employment.’
These changes are the biggest reforms to apprenticeships in a decade. For the first time, employers will have more flexibility to upskill their staff through seven new apprenticeship units aligned to Industrial Strategy priorities including artificial intelligence, engineering, clean energy and construction, and we will develop further Units?informed by ongoing input from industry.? Foundation apprenticeships, supported with an incentive for employers, will also expand into hospitality and retail from April 2026, building on foundation apprenticeships launched in engineering, manufacturing and digital. These entry-level opportunities will support young people aged 16 to 21 as they take the first step on the career ladder and move from education into lasting employment.
The reforms are backed by Michelin Star celebrity chef Tom Kerridge, who has provided dozens of apprenticeships at his pubs. Alongside this, the Growth and Skills Levy will be changed to reprioritise investment where it is needed most, to ensure that young people can access the jobs essential to our economy’s growth as well as ensure apprenticeships remain fit for purpose and prioritise value for money. This means apprenticeship standards that do not meet the country’s skills priorities or take resources away from opportunities for young people and could be better delivered through on the job training will be defunded.
