The British government will provide employers with £3,000 for every long-term unemployed young person they hire, as part of a plan to reduce the welfare bill and tackle the youth jobs crisis. The scheme, launching Tuesday, aims to help 60,000 people aged 18-24 enter work over the next three years.
Eligibility and Scope
Employers in England, Scotland, and Wales can access the grant if they hire a young person who has been out of work for six months or more. The initiative comes amid criticism from opposition leaders and business groups who argue that Labour's policies, including increased employer national insurance contributions and a rising minimum wage, have worsened the youth employment crisis.
A government-commissioned report by former minister Alan Milburn found that 1 million people aged 16-24 in the UK – about one in eight – are not in employment, education, or training (Neet). A decade ago, the UK's Neet rate was near the EU average; in 2025, only Romania had a higher rate.
Government and Business Support
On Monday, Prime Minister Keir Starmer and Work and Pensions Secretary Pat McFadden will host a roundtable in Downing Street with hospitality businesses supporting the scheme. The first employer to back the initiative is Merlin Entertainments, which owns Legoland Windsor, Chessington World of Adventures, Alton Towers, and London's Sea Life Aquarium. Merlin will create 300 jobs for young people over three years.
Starmer said: “We often say in this country that every child or young person should go as far as their talents will take them. But too often they are held back by a status quo that doesn’t work for them. 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. 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.”
Regional Disparities
The Milburn report highlighted regional disparities in the youth jobs crisis. In Barnet, north London, just 1% of 16- and 17-year-olds are classed as Neet, while in Dudley, West Midlands, the figure is 21.5%. Of the 10 English local authorities with the highest proportion of young people not in work, training, or education, eight are in the north or the Midlands. The report also found youth unemployment costs Britain more than £125bn a year.
McFadden said: “Young people want the chance to work, earn, learn and build a better future. That’s why this 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, and subsidised work for those who face more challenges.”
Reactions and Additional Measures
Paul Nowak, Trades Union Congress general secretary, said: “This is an important step forward to help tackle the number of young people stuck out of work. But the scale of the crisis means the government must go further and faster. That means putting the turbo boosters on the jobs guarantee scheme to ensure it’s more widely available and available sooner to those who need it. And while increased investment is essential, we must also ensure every apprenticeship offers a genuine opportunity to learn and earn.”
The jobs guarantee scheme, currently being piloted, enables eligible 18- to 24-year-olds who have been claiming universal credit and looking for work for 18 months to get a fully funded job for six months. The government will fund 100% of employment costs for up to 25 hours a week at the relevant minimum wage.
