The government is to run a “major employment drive” all over the UK to stem the flow of young people who are neither “earning nor learning”.
There has been a 37% increase in the number of young people who are out of work in the UK and not in college or university, in the three years between 2021 and 2024. This amounts to almost 250,000 young people.
Grants will be available to ensure that paid jobs are created – perhaps as many as 200,000 in the UK. The Jobs Guarantee is to be expanded to the age group from 18 to 24 years old.
This is hailed as a transformation of apprenticeship schemes, and will be formally announced on Monday by Work and Pensions Secretary, Pat McFadden at Waltham Forest College.
Mr McFadden said: “These measures will give life-changing opportunities to young people and significantly reverse the increase we inherited in those not in education, employment or training.
“We are focusing funding where it’s needed most and giving employers the flexibility and support they’ve asked for.
“These reforms will give young people a vital first step on the career ladder and help business leaders recruit the talent that will grow their companies.”
There will be new apprenticeship units established including artificial intelligence, engineering, clean energy and construction, and the possibility of more as industry is consulted.
The “New Deal” will include these components in Scotland:
- 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.
Tina McKenzie MBE, Policy Chair of the Federation of Small Businesses, said: “This is a game-changer to tackle youth unemployment and inactivity, which FSB has campaigned about as levels remain stubbornly high after the pandemic.
“Creating good opportunities for young people is absolutely crucial – for individuals themselves, for small businesses and for local economies and people. 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.
“It’s the right choice to prioritise public funding to back small employers in particular to provide apprenticeships for young people. The UK can’t afford a lost generation amid rising employment costs, therefore we’re pleased the Government has listened carefully on this and stepped up with this pro-jobs, pro-opportunities package.”
- 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.”
Scottish Secretary, Douglas Alexander, said: “Too many young Scots have been let down over recent years by a lack of opportunity, so it is vital the Youth Guarantee is available to as many as possible.
“Widening eligibility for the Jobs Guarantee scheme to include 22 to 24 year-olds, as we roll out nationally later this year, will help young people to transform their lives with pathways into work, whether that’s in our growing renewables sector, in construction trades that are crying out for skilled workers, or in hospitality.”
“This is also a boost for Scottish businesses, who can receive £3,000 for every hire aged 18-24 who have been on Universal Credit for at least six months through the new Youth Jobs Grant – bridging the gap between talent and opportunity.
“The UK Government is backing Scotland’s young people with the support, training and guaranteed employment they need to build careers, not just find jobs.”
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.
Tom Kerridge said: “I welcome this announcement which will provide amazing opportunities to young people looking to get into this industry and others, to learn a trade and earn along the way.
“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. I’m pleased Pat McFadden has made this a priority.”
