Business Doncaster welcomes Government incentives for youth employment

A major youth employment drive backed by £1 billion will help create 200,000 jobs for young people, alongside the biggest transformation of apprenticeships in a decade.

• Major employment drive: backed by large and small businesses will reverse rising number of young people neither earning nor learning, after a 37% increase between 2021 and 2024.
• Additional £1 billion to be invested in grants to help unlock over 200,000 paid jobs for young people, with Jobs Guarantee to be expanded to ages 18-24
• New foundation apprenticeships in hospitality and retail, with up to £2,000 for employers to support 16-21-year-olds into work.

The measures focus on helping employers reduce barriers to recruiting young talent and include:

• £3,000 Youth Jobs Grant SME's will receive £3,000 for every young person hired  (18–24-year-old) who have been on Universal Credit and looking for work for six months - expected to support 60,000 young people nationally over 3 years.  
• £2,000 apprenticeship incentive for SMEs hiring each new employee aged 16–24, aimed at creating 50,000 additional apprenticeships.
• Stackable incentives - SMEs hiring a young person on Universal Credit and placing them on an apprenticeship could receive up to £5,000 in combined support.
• 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, bringing the total to be supported through the scheme to over 90,000 in the next three years.
• 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.

It is the latest step in the Government's commitment to ensuring every young person aged 16-24 can earn or learn. These changes are backed by an additional £1bn, 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. This will support almost one million young people and help deliver up to 500,000 opportunities to earn and learn.

The government is expanding practical pathways into work to tackle rising youth unemployment. Major reforms, described as the biggest changes to apprenticeships in a decade will give employers more flexibility through seven new apprenticeship units aligned to key industries such as AI, engineering, clean energy, and construction, with more to follow based on industry input.

Foundation apprenticeships for 16–21‑year‑olds will also expand into hospitality and retail from April 2026, building on existing programmes in engineering, manufacturing, and digital to help young people move from education into long‑term employment.

At the same time, the Growth and Skills Levy will be refocused to prioritise investment where it is most needed, ensuring apprenticeships deliver value for money and support the skills essential to economic growth.

Programmes that don’t meet national skills priorities or could be delivered more effectively through on‑the‑job training will be defunded. Overall, the ambition is to close the skills gap, support employers, and create an economy where more young people can access meaningful, future‑focused careers.