BBCThe Chancellor has announced £820 million of funding for 18 to 21-year-olds who are “not earning or learning” for more than 18 months.
The money will pay for three years of the Youth Guarantee Scheme offering young people in England help to find apprenticeships, training, education or jobs.
The latest figures show that almost one million young people are not in education, employment or training – known as NEET.
Giving her budget speech on Wednesday, Rachel Reeves said the money would “give support and opportunity to young people who have been let down by the Conservatives”.
Under the plan, 18 to 21-year-olds who have gone 18 months without working or studying on Universal Credit will be offered a six-month paid work placement – and those who do not take up the offer will be stripped of their benefits.
Reeves also announced that the government would be funding a scheme to make apprenticeship training “completely free” for people under 25 in small and medium businesses.
Nick Harrison, CEO of education think tank Sutton Trust, welcomed the planned changes to apprenticeship schemes, but called on the government to go further.
“Apprenticeships have the potential to be a powerful tool for social mobility, providing an alternative route to highly skilled industries,” he said.
David Hughes, head of the Association of Colleges, said the money would enable colleges to support more young people so they do not miss out on education, employment or training.
But he said more money is needed, he said: “To fully support nearly a million NEETs young people, more adult education funding will be needed, and that budget will need to be increased even further to ensure millions of adults are not left behind by the technology and green revolutions we are seeing before our eyes.”
Lancaster University warned that the scheme may be “too blunt a tool to successfully support young people into secure and sustained employment”.
Rebecca Florison, lead analyst at the University’s Work Foundation, said, “The evidence is clear that forcing individuals to take ‘any job’ may cause more harm than good to their future employment prospects.”
The announcement comes amid growing concern over youth inactivity. Around 946,000 people aged 16 to 24 are currently NEETs – one in eight of the age group – close to an 11-year high.
The DWP has recently launched an investigation into why this figure is so high.
The jobs market is particularly challenging for young people, with figures to 2025 showing a decline in the number of vacancies and fewer people on the payroll.
The official NEET figures include stay-at-home parents as well as job seekers.
Most of the youth (580,000) who are NEETs fall in the economically inactive category, while 366,000 are unemployed.
According to research from the Youth Futures Foundation, the increase in chronic illness among youth over the past three years has been one of the main causes of economic inactivity.
The Youth Guarantee funding formed part of a wider welfare reform package in the Budget, where Reeves said the system should “protect those who can’t work and empower those who can”.
Despite changes to the forecasts released by the Office for Budget Responsibility (OBR) alongside the Budget, relatively few inactive people are predicted to return to work before the next election.
The legal minimum wage for over-21s will rise by 4.1% in April from £12.21 to £12.71, with wages for 18 to 20-year-olds rising by £10 to £10.85.
Some businesses – particularly in the hospitality sector – have warned that this could lead to companies stopping hiring young people, thwarting government efforts to increase youth employment.
<a href