Employers will be paid £3,000 for each unemployed young person they hire in a £1 billion expansion to the government’s youth guarantee scheme.
The government will also raise the upper age limit of the jobs guarantee scheme, which fully subsidises jobs for young people who have been unemployed for 18 months, from 21 to 24.
Latest quarterly estimates showed there are around 957,000 young people aged 16 to 24 not in education, employment or training (NEET).
Work and pensions secretary Pat McFadden will announce a £2.5 billion “new deal” for young people in a speech at Waltham Forest College tomorrow (Monday).
Around £1 billion of that has been earmarked for hiring grants and subsidies for businesses to encourage them to hire young people. The rest includes reforms to apprenticeships, such as new foundation apprenticeships, alongside existing anti-NEET policies.
Prime minister Keir Starmer said: “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.”
Jobs granted
Taken together, the Department for Work and Pensions (DWP) hopes the new youth jobs grants and the expanded jobs guarantee will create 200,000 jobs for young people over the next three years.
The new youth jobs grants will pay businesses £3,000 for each unemployed young person aged 18 to 24 they hire. To be eligible, the young person will have to have been claiming universal credit for six months. DWP estimated this would get 60,000 young people into jobs over the next three years.
It is not yet clear when the grants will be made available, or if there will be any other criteria around how long the young person needs to be hired for.
It comes alongside an announcement of an apprenticeship incentive payment worth £2,000 for each 16 to 24 year old hired by a small or medium sized business. FE Week understands eligible businesses could claim both the youth jobs grant and the apprenticeship incentive simultaneously.
Jobs guaranteed
Around 35,000 more unemployed young people will be eligible for a government-subsidised job through the jobs guarantee, McFadden will announce.
The scheme’s current upper age cap of 21 will be raised to 24 in August. This means the number of young people hoped to benefit from the scheme has risen from 55,000 to 90,000 over the next three years.
Once a young person has claimed universal credit for 18 months, they will be eligible for a six-month paid work placement through the jobs guarantee.
The government is promising to cover all of each young person’s employment costs for up to 25 hours a week, alongside wraparound support to help them succeed and “transition into sustained employment”.
Phase one of the scheme is due to launch next month in six areas: Birmingham and Solihull, East Midlands, Greater Manchester, Hertfordshire and Essex, central and east Scotland and south west and south east Wales.
DWP will enlist local delivery organisations that will be paid up to £2,650 to provide jobs guarantee participants with wraparound support and training.
Stephen Evans, chief executive of Learning and Work Institute, said: “The government is right to extend help like the job guarantee to those aged 22–24, as this group is more likely to be NEET than the 18–21 year olds the policy was previously focused on.
“There is still lots of work to be done, including proactively engaging the one in two NEET young people outside the benefits system and helping employers to give young people the first steps on their careers. If we all work together so every young person is able to make the most of their talents, we will all benefit.”
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