Cash for Jobs: Firms Paid to Hire Unemployed Youth

UK launches a youth jobs grant offering £3,000 to firms hiring unemployed young people. The plan aims to create 200,000 jobs and cut rising NEET levels.

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Mar 16, 2026 - 11:01

Cash for Jobs: Firms Paid to Hire Unemployed Youth

Under the government's new investment initiative to tackle youth unemployment, companies will be awarded grants to encourage them to hire more young people.

The Minister aims to create 200,000 jobs and is pledging a guaranteed £1 billion for various initiatives.

Companies will receive £3,000 for every individual aged 18 to 24 they hire who has been actively seeking employment for six months or longer; meanwhile, small and medium-sized enterprise (SME) beneficiaries will be granted £2,000 for each new apprentice they take on.

The Labour Party has faced criticism from the Conservative Party regarding "vanishing" employment opportunities. In the final quarter of last year, the number of young people who were not engaged in education, employment, or training—often referred to as 'NEETs'—approached the one-million mark.

Pat McFadden, the Secretary of State for Work and Pensions, is set to announce the 'Youth Jobs Grant' on Monday.

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These jobs are expected to provide assistance to approximately 60,000 people.

The scope of an existing 'Employment Guarantee' scheme—under which young people receiving Universal Credit and having sought work for 18 months are guaranteed a six-month job placement—will also be expanded. Currently, this scheme is available to young people aged 18 to 21; this eligibility will now be extended to include those up to the age of 24.

McFadden stated that these new measures would offer "life-changing opportunities to young people," thereby helping to "significantly reduce the rise in the number of young people outside of education, employment, or training" (a challenge inherited from the previous administration).

He further added, "We are focusing our efforts precisely where they are needed most, and providing companies with the financial incentives and support they have specifically requested." Prime Minister Sir Keir Starmer stated, "These reforms advance our goal of building an economy that works for everyone; furthermore, they will help bridge the skills gap and secure meaningful employment for more young people."

Michelin-starred chef Tom Kerridge also endorsed the plan, remarking, "These incentives will give a tremendous boost to our industry."

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The Conservative Party has claimed that the government's 'Employment Rights Act'—along with the increase in 'National Insurance contributions' levied on companies—has adversely affected young people seeking employment.

Shadow Secretary for Work and Pensions, Helen Whately, said, "The best way to tackle youth unemployment is to help businesses create jobs—rather than crushing them under a heavy tax burden—so that those funds can be used to drive growth and offer concessions." The Conservative Party states that it will lower business rates for "thousands of High Street businesses" and "repeal" the legislation set to come into force later this year.

Under this legislation—which applies to England, Scotland, and Wales—employees will have the right to claim unfair dismissal just six months after starting a job. Currently, there is a two-year qualifying period for this right.

As part of its election manifesto, the Labour Party had pledged to grant all employees the right to claim unfair dismissal from their very first day of employment.

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