Businesses can now apply for a new £3,000 government grant for every eligible young person they hire, as ministers step up efforts to tackle youth unemployment and encourage employers to create more entry-level jobs.
Launched today (30 June), the Youth Jobs Grant will provide employers with £3,000 for each eligible 18 to 24-year-old they recruit, with the government aiming to help up to 60,000 young people into work over the next three years.
The launch comes after official figures published late last month showed the number of 16 to 24-year-olds not in education, employment or training (NEET) had exceeded one million for the first time since 2013.
The scheme is part of the government's wider £2.5 billion Youth Guarantee, which also includes expanded Jobcentre support and a Jobs Guarantee offering fully funded six-month roles for young people who have been unemployed for at least 18 months.
To qualify for the grant, employers must recruit a young person aged 18 to 24 who has been claiming Universal Credit and looking for work for at least six months. Payments will be made in two instalments – £1,800 after six weeks and £1,200 after 18 weeks, subject to employment conditions being met. Businesses can apply online.
Prime minister Keir Starmer said the initiative would help remove barriers preventing young people from entering the workforce.
"We are turning the page on that, putting in place the building blocks of real reform to expand opportunity for young people and helping them into work," he said.
"This is the foundation for a new contract with the next generation, so every young person has a clear path into learning or earning, and the chance to build a secure and successful future."
Work and pensions secretary Pat McFadden said the grant would encourage employers to invest in young talent.
"Young people want the chance to work, earn, learn and build a better future," he said.
"That's why the government is backing employers large and small with a £3,000 grant to take a chance on young people who are ready to work and need that first step on the ladder."
Earlier this month , government figures confirmed the number of NEETs (young people aged 16 to 24 not in education, employment or training) in the UK has topped one million.
Ahead of the launch, the prime minister and McFadden hosted hospitality businesses at a Downing Street roundtable to encourage employer participation in the scheme.
Hospitality trade body UKHospitality welcomed the initiative, saying it would help reduce employment costs while creating opportunities for young people.
Allen Simpson, chief executive of UKHospitality, said: "Hospitality is a sector that offers opportunities for anyone, particularly when it comes to helping people back into work.
"The Youth Jobs Grant is a positive initiative to reduce the cost of employment, create more opportunities and support hospitality businesses."
The Federation of Small Businesses (FSB) also backed the scheme, with policy chair Tina McKenzie saying the grant would help small firms recruit new talent.
"The Youth Jobs Grant will help open doors for more young people, while helping small firms to create jobs and build the talent pipeline they need to grow," she said.
"With almost half of small employers telling us that financial incentives would encourage them to hire an unemployed person, this initiative should go a long way in tackling youth inactivity and reducing the rising number of young people not in education, employment, or training."
The launch has already secured support from Merlin Entertainments, which has pledged to create 300 jobs for young people over the next three years across its UK attractions, including LEGOLAND Windsor, Chessington World of Adventures, Alton Towers and SEA LIFE London.
From this week, Jobcentres across Great Britain are also rolling out enhanced support for young Universal Credit claimants, including more frequent work coach appointments, skills assessments and tailored pathways into employment, apprenticeships, training and further education.