Major drive to get underneath 25s on advantages into work as companies provided £3,000

Keir Starmer said backing the younger generation is “one of the most important investments we can make in this country’s future” amid record levels of youngsters out of work

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Businesses will receive a £3,000 grant to hire a youngster who has been on benefits and out of work for six months under a major drive to slash youth unemployment.

It is part of a £1billion package to be unveiled on Monday to help create 200,000 jobs for young people over three years. Keir Starmer said backing the younger generation is “one of the most important investments we can make in this country’s future” amid record levels of youngsters out of work.

Nearly one million young people are not in education, employment or training (NEET), with the pandemic, long-term sickness, mental illness and neurodivergence all blamed for a recent surge. Work and Pensions Secretary Pat McFadden will give a major speech at a college in London on Monday setting out urgent action to tackle the “generational challenge”.

READ MORE: Minimum wage rise update as TUC chief slams ‘scaremongering and misleading’ claims

His landmark package includes a new Youth Jobs Grant where businesses will receive £3,000 for every young person they hire aged 18-24 who has been on universal credit and looking for work for six months. The approach has been chosen as it is expected to make a quick impact after it comes into force from June.

New foundation apprenticeships in hospitality and retail, with up to £2,000 for employers to support 16 to 21-year-olds into work, are also part of the plans. Small and medium businesses will also be incentivised by a £2,000 payment for each new employee aged 16-24 they hire.

The Jobs Guarantee – which sees the government pay the wages of a young person for the first six months – will also be extended to a wider age range, from 18- to 21-year-olds to 18- to 24-year-olds from Autumn. The scheme targets those who have been out of work for 18 months.

The Government has also launched a new AI and automation practitioner apprenticeship to help workers and businesses get better artificial intelligence skills.

Mr 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.”

Mr McFadden’s speech will on Monday make a clear signal that the Government is ready to re-attempt welfare reforms – but this time with a focus on boosting employment. It comes after ministers were last year forced to ditch its welfare plans following a major rebellion from MPs over rushed cuts to disability benefits.

Mr McFadden will describe the human cost of the welfare system as a “tragedy”, saying: “Today the biggest issues facing the system are the challenges of youth unemployment and the growing number of people on long term sickness and disability benefits. Acting on this should be a cause that motivates us all. The human cost is a tragedy. The waste of potential appalling. And the financial cost enormous.”

Michelin Star celebrity chef Tom Kerridge, who has provided dozens of apprenticeships at his pubs, voiced his support for new hospitality and retail apprenticeships. He said: “I’ve trained apprentices in my restaurants, and I know what a great start it gives them in their careers, and these incentives will give our industry a great boost.”

Tina McKenzie MBE, Policy Chair of the Federation of Small Businesses, said: “The new incentives announced today are a clear and decisive step forward – helping small firms to hire those on Universal Credit and to create apprenticeships.”

TUC General Secretary Paul Nowak welcomed the expansion of the Jobs Guarantee but called for it to go further. “Young people should get access to the Jobs Guarantee sooner,” he said. “And while increased investment in apprenticeships is essential, we must also ensure every apprenticeship offers a genuine opportunity to learn and earn.”

‘Our kids deserve better than this’

By Jacqui Smith, Minister for Skills

If there’s one thing Mirror readers know, it’s the value of hard graft.

You work hard, play by the rules and hope your kids will get the same chances you had – a decent job, security and a future they can look forward to. But for too many young people today, that path just isn’t as clear.

Across Britain, nearly a million young people aren’t in education, employment or training. That’s a million young lives stuck in limbo – young people with talent and ambition who simply can’t find the right way in. And the routes that should help them get started are shrinking.

Take apprenticeships. For generations they’ve been one of the best ways for young people to earn while they learn and build a real career. But in recent years apprenticeship starts among young people have fallen by around 40% in the last decade and more than half go to over 25s. Neglect by the last government has made the pathways into work confusing, fragmented and difficult to navigate.

Because young people don’t lack ambition. They don’t lack talent. What they lack is a system that works in their favour. We need a system that opens doors, not closes them. One that connects young people to real opportunities in their communities. One that works hand-in-hand with employers so that training leads to real jobs and real careers.

Because this isn’t just about statistics – it’s about fairness. No young person should be written off before they’ve had the chance to prove what they can do.

Government has a role to play. Employers do too. Schools, colleges and communities all have a part to play in helping the next generation get their start. When we back young people, everyone benefits.

We’re already bringing youth hubs to every community, guaranteeing jobs for young people stuck on Universal Credit and boosting apprenticeships. This week you will hear our plans to go even further with more investment in our Youth Guarantee which promises every young person the opportunity to earn or learn.

We’re putting our young people first. Because when young people succeed, Britain succeeds too.