Young people on benefits will be offered jobs in construction and hospitality and could lose some of their financial support if they say no under new government plans to drive down unemployment.
Ministers have announced an £820 million package aimed at halting the rise in youth unemployment. The money includes funding for training and work experience in construction, hospitality and health and social care for 350,000 young people on universal credit.
Others will be offered “intensive support” to help them find work, and government-backed guaranteed jobs will be provided for up to 55,000 young people from spring 2026.
However those who don’t engage with help without a good reason could lose some of their benefits.
Youth unemployment is at the highest level since the Covid pandemic driven by a weak economy, an increasing minimum wage, tax increases on business, and rising numbers of young people with mental ill health and disability.
Labour has been criticised for fuelling a jobs market slowdown due to chancellor Rachel Reeves’ increase in employers’ national insurance contributions.
The tax increase has particularly affected the hospitality and retail industries, sectors where lots of young people often get a first job.
There has also been a rise in “Neets” -16-24-year-olds not in employment, education or training in recent years. Some 940,000 young people are now considered Neet, a rise of 195,000 in the last two years driven mainly by increasing rates of sickness and disability.
And the Resolution Foundation has warned that the figure is on course to reach one million for the first time since the aftermath of the financial crisis, when it peaked at 1.2 million in 2012.
Work and pensions secretary Pat McFadden said: “Every young person deserves a fair chance to succeed. When given the right support and opportunities, they will grasp them.”
Former health secretary Alan Milburn has been asked to carry out a review of the rising number of Neet young people that will shape further reforms to health and welfare.
Mr McFadden said the new funding was “a down payment on young people’s futures and the future of the country, creating real pathways into good jobs and providing work experience, skills training and guaranteed employment”.
Further plans for young people are expected to be set out in the coming week as the government prepares to publish its national youth strategy.
