Grant scheme announced as part of support to address youth unemployment

Businesses will be able to receive a new Youth Jobs Grant £3,000 for every young person they hire aged 18-24 who has been on Universal Credit and looking for work for six months as part of government efforts to tackle youth unemployment.

Support is expected to back jobs for around 60,000 young people over the next three years and is part of a package of £1 billion that aims to create a total of 200,000 youth employment opportunities. It comes as apprenticeships starts among 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.

Alongside the Youth Jobs Grant, government has also announced an 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.

An Apprenticeship Incentive of £2,000 for each new employee aged 16-24 taken on by an SME has also been announced. Reforms to the Growth and Skills Levy will also prioritise young apprentices, secure value for money and give school and college leavers more opportunities than ever to build careers in cutting edge industries.

Changes to apprenticeships sit as part of a major series of reforms to the system. 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. An apprenticeship unit is a short, flexible training course to help respond quickly to evolving skills needs. Development of further new units will be informed by input from industry.

Foundation apprenticeships, supported with an incentive for employers, will also expand into hospitality and retail from April 2026, building on those 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.

Major employers and business groups have welcomed the reforms and support for businesses.

Tina McKenzie MBE, Policy Chair of the Federation of Small Businesses, said:

“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.”

John Boumphrey, UK Country Manager at Amazon, said:

“Amazon welcomes the expansion to the Youth Guarantee and increased investment in youth employment – this enhanced support will help more people who face barriers to work. We’re also pleased to see the focus on apprenticeships and SMEs, and look forward to continuing our partnership with DWP to provide opportunities for young people across the UK.”