£1 billion employment drive to tackle youth unemployment in the UK
By Jess Watts | 23 March 2026 | News & Events
A major UK employment drive, backed by £1 billion, will help combat high levels of youth unemployment, creating 200,000 jobs for young people.
The Office for National Statistics recently revealed that 16.1% of 16-24-year-olds are unemployed – the highest figure in 11 years. Similarly, apprenticeship starts amongst young people are down 40% in the last decade, with almost one million young people ‘not earning or learning’.
This is the latest step in the UK Government’s commitment to ensuring every young person aged 16-24 has the opportunity for work or education. The initiative will support almost one million young people and help deliver up to 500,000 opportunities to earn and learn.
The ‘New Deal’ announced by Work and Pensions Secretary, Pat McFadden, includes:
- A Youth Jobs Grant. Businesses will receive £3,000 for every young person they hire aged 18-24 who has been on Universal Credit and looking for work for six months.
- Expansion of the Jobs Guarantee from 18-21 to 18-24. This will help create more than 35,000 extra subsidised jobs.
- An Apprenticeship Incentive that grants SMEs (small and medium-sized enterprises) £2,000 for each new employee aged 16-24.
- 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’.
The changes are the ‘biggest reforms to apprenticeships in a decade’, granting employers more flexibility to upskill their staff, with entry-level opportunities supporting young people aged 16-21 as they take their first steps into employment.
Pat McFadden comments: “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. 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.”
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The changes are backed by £1 billion, taking the total investment into the Youth Guarantee and the additional investment in the Growth and Skills Levy to £2.5 billion over the next three years.
The funding will help deliver up to 500,000 opportunities for young people, including:
- 295,000 training and work experience opportunities.
- 150,000 work experience.
- 145,000 SWAPs (sector-based work academy programmes).
- 200,000 jobs and apprenticeship opportunities.
- 50,000 apprenticeships.
- 90,000 jobs guarantee jobs.
- 60,000 hiring incentives.
Caroline Larissey, chief executive of the National Hair & Beauty Federation (NHBF), adds: “Hair and beauty is one of the most powerful vehicles we have for getting young people into skilled, fulfilling work. We welcome any policy that lowers the barrier for businesses to say ‘yes’ to a young person who is ready to learn.
“The expanded Youth Guarantee, combined with incentives for smaller employers, is a step in the right direction and we look forward to working with Government to ensure our sector can access every benefit available.”
Click to read the Government’s press release regarding the major employment drive.
