A major youth employment drive backed by £1 billion has been announced by the government today (March 16) that will help create 200,000 jobs for young people, alongside the biggest transformation of apprenticeships in a decade.
Under the initiative, new foundation apprenticeships has been announced in hospitality and retail, with up to £2,000 for employers to support 16-21-year-olds into work.
Announced today (March 16) in a speech by Work and Pensions Secretary Pat McFadden at Waltham Forest College, the “New Deal” for young people includes 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. An Apprenticeship Incentive of £2,000 for each new employee aged 16-24 taken on by an SME.
As part of wider reforms, this will drive progress to our target of creating 50,000 more apprenticeships. Further reforms to the Growth and Skills Levy to prioritise young apprentices, secure value for money and give school and college leavers more opportunities than ever to build careers in cutting edge industries.
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.
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."
Alongside this, the Growth and Skills Levy will be changed to reprioritise investment where it is needed most, to ensure that young people can access the jobs essential to our economy’s growth as well as ensure apprenticeships remain fit for purpose and prioritise value for money.
Responding to the Government’s ‘New Deal’ for young people, announcing £1bn investment into youth employment, Helen Dickinson, Chief Executive of the BRC, 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.”