Job Guarantees for Young People
We previously advised on the Chancellors’ intention to ensure all young people who have been on Universal Credits for 18 months or longer will be offered a guaranteed paid work placement.
Those who do not take up the offer could face losing their benefits. This comes amidst growing concerns on how to tackle youth unemployment and boosting the economy by getting people off of benefits, whilst helping young people develop new skills.
Earlier this year the Office for National Statistics (OFNS) reported an increase in the number of young people aged 16 to 24 years Not in Education, Employment or Training (NEET) in April to June 2025; the estimated total at the time was 948,000, up from 923,000 in January to March 2025, an increase of 24,000 on the quarter. This increase was largely made up of young women, with an increase of 25,000 on the previous quarter, while young men saw a decrease of 1,000. Of the total number of young people who were NEET, 497,000 were young men and 450,000 were young women.
To further support Government’s commitment to ensuring young people are earning or learning rather than receiving benefits they have invested an additional £1 billion, increasing spending in this sector to 2.5 billion over the next three years.
The funding increase builds on a wide range of measures the Government is bringing forward to support young people, including expanded funding for youth trailblazers, and a major investigation spearheaded by Alan Milburn into the barriers preventing the young from accessing work.
Employers are set to be offered incentives if they join the Job Guarantee Scheme to offer young people work or on the job training. Access to funding will be granted over a phased period of time and will initially be rolled out in six targeted areas, Birmingham and Solihull, East Midlands, Greater Manchester, Hertfordshire and Essex, Central and East Scotland, Southwest and Southeast Wales and will be available to young people aged 18 to 21.
In a speech announced this week (16th March), the Work and Pensions Secretary Pat McFadden announced future plans that will introduce the following:
- 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.
In addition to the existing foundation apprenticeships that are available in the engineering, manufacturing and AI, support with incentives for employers will allow these types of apprenticeships to expand into hospitality and retail from April 2026.
From the Autumn 2026, the Government will expand the Jobs Guarantee to all eligible 18-24 year olds who are on Universal Credit and have been looking for work for 18 months. They will benefit from 25 hours/week of fully subsidised six-month paid work. Young people on the scheme will be paid at the relevant minimum wage and also receive fully funded wrap around support.