- Businesses will receive £3,000 for hiring eligible young people aged 18 to 24.
- The scheme targets more than one million young people who are not in employment, education or training.
- Ministers say the grant is part of a wider plan to reduce youth unemployment and encourage alternatives to university.
The UK government is offering businesses £3,000 to hire unemployed young people as it steps up efforts to tackle rising youth inactivity. The Youth Jobs Grant, announced by prime minister Sir Keir Starmer, is aimed at encouraging employers to recruit people aged 18 to 24 who have been claiming Universal Credit for at least six months.
The scheme comes as Britain continues to grapple with a growing number of young people who are not in employment, education or training (NEET). More than one million people now fall into that category, raising concerns about long-term skills shortages, lower productivity and weaker economic growth.
A financial incentive to get young people into work
Under the new programme, employers will receive £3,000 for every eligible young person they recruit. The incentive is expected to work alongside the government's existing Jobs Guarantee, which funds six months of part-time employment for people who have been out of work for at least 18 months.
Speaking at a Downing Street roundtable with hospitality businesses including Burger King, KFC and Costa Coffee, Starmer reportedly said university should not be viewed as the only route to success. He argued that apprenticeships, vocational training and employment opportunities should play a bigger role in helping young people build careers.
The prime minister also reportedly said the hiring incentive forms part of a broader strategy to reduce child poverty and improve employment opportunities for younger generations. Other measures include expanding free childcare, rolling out free breakfast clubs and encouraging more school leavers to consider alternatives to higher education.
Can the scheme make a difference?
The government's latest intervention has received some support from policy experts, although questions remain over its long-term impact.
According to the Resolution Foundation, the Youth Jobs Grant is expected to create around 2,800 additional jobs at an estimated public cost of £36,700 for each extra job created. The think tank also found that the existing Jobs Guarantee costs around £38,000 per additional job, making it significantly cheaper than removing employer National Insurance contributions as a way of boosting employment.
The effectiveness of the programme is likely to depend on how many businesses take up the incentive and whether the jobs created lead to lasting employment. With more than one million young people currently outside work and education, ministers are hoping the financial support will encourage employers to offer opportunities that might not otherwise have existed.
