A new plan will help businesses recruit young people who have been out of a job for at least six months, Sir Keir Starmer has announced.
The Prime Minister said the youth jobs grant will offer firms £3,000 to hire an 18 to 24-year-old who has been on universal credit for six months or more, in a bid to help the more than a million young people not in employment, education or training (Neet).
Sir Keir was hosting a No 10 roundtable with hospitality industry leaders, including from Burger King, KFC and Costa Coffee, with Work and Pensions Secretary Pat McFadden also present.
The PM said: “From tomorrow we’re announcing a £3,000 incentive to businesses to take young people who’ve been out of work for six months and give them a job.”
He said university should not be seen as the only route to success, and “it is crucial that when we say every young person should go as far as their talent and ability will take them, we mean it.”
Sir Keir added: “I have a vested interest, I should declare, not just as Prime Minister – I’ve got two teenage children. My son is 18 tomorrow, and therefore these are live discussions in our household.
“And actually, it’s really interesting to see first-hand the sort of pressures and opportunities that young people actually go through when they’re in their teenage years.”
He said the youth jobs grant will go hand in hand with the jobs guarantee, which funds six months’ part-time employment for those out of work for at least 18 months.
The guarantee of a job for those who have been out of work is “probably the most single effective way to help people into work,” he said.
The youth jobs grant and jobs guarantee were part of a strategy aimed at lifting children out of poverty and helping young people into work, Sir Keir said.
The Government introduced free breakfast clubs, and more than 300,000 children have already taken part since the programme began in the summer term last year.
The strategy also included the expansion of free childcare to 30 hours a week for eligible working parents in England with children aged between nine months and four-years-old, and lowering the target number of university entrants to encourage other pathways for young people such as apprenticeships.
The outgoing prime minister said he wants the next Government to build on what he has done to help young people out of poverty and into work.
He told the roundtable: “What I want to make sure is that, having put these blocks in place over the last two years, that the next stage of this administration takes that on and builds from there.”
A report from the Resolution Foundation think tank estimated the youth jobs grant will create 2,800 additional jobs at a cost of around £36,700 each.
It also found the jobs guarantee comes in at roughly £38,000 per additional job, making it three-and-a half times cheaper than scrapping employer national insurance contributions.