Businesses to be paid grants in a bid to get more young people in employment

The work and pensions secretary Pat McFadden is expected to announce a £1bn package today (Monday) in a bid to create 200,000 jobs.

Around 60,000 individuals are set to be supported, as businesses will receive £3,000 for every person between the ages of 18 and 24 hired who has been searching for a job for six months or more.

Small and medium firms will be paid £2,000 for every new apprentice aged 16-24 that they employ.

The current policy of pledging to give a young person a six-month job if they are on Universal Credit and have been seeking work for 18 months will be expanded from 18-21 to 18-24.

It was reported in the final quarter of last year that the number of young people not currently in education, employment, or training is close to one million.

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.”

Prime Minister Sir Keir Starmer supported the commitment and added: “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”.

The Conservative Party criticised the Labour government and said job opportunities were “disappearing” due to the Employment Rights Act and increased national insurance contributions.

Shadow work and pensions secretary Helen Whately said: “The best way to tackle youth unemployment is to back businesses to create jobs, not tax them out of existence to fund benefits and subsidies.”

She pledged that the Conservatives will “cut business rates for thousands of high street businesses and roll back Labour’s Employment Rights Act” to create “real opportunities for young people and get Britain working again.”

British Retail Consortium chief executive Helen Dickinson said: “With youth unemployment at crisis point, it is great to see Government’s commitment to getting more young people into work with the expansion of the Youth Guarantee and the new Youth Jobs Grant. Foundation apprenticeships for retail could also be a game changer but only if developed in true partnership with the industry.

“However, Government risks undermining its own ambition to tackle youth unemployment through other policies. The Employment Rights Act must work with not against opportunities for young people. Without a joined-up approach, well-intentioned initiatives will lose their impact.”