The package includes training and work experience for 350,000 young people on Universal Credit, alongside “intensive support” for those struggling to enter the labour market.
Up to 55,000 government backed job placements are planned from spring 2026, offered on a six-month basis and paid at the legal minimum wage. Those who do not engage with the support without good reason could face a reduction in benefits.
‘A fair chance’
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.”
He described the new funding as “a downpayment on young people’s futures and the future of the country.”
The announcement comes as the number of young people not in employment, education or training has risen to 940,000, up 195,000 in two years. Independent forecasters warn the figure is on course to reach 1 million for the first time since 2012.
As part of the wider reforms, former health secretary Alan Milburn has been commissioned to review rising rates of youth inactivity linked to illness and disability.
The hospitality sector sits at the centre of the programme, with ministers highlighting the industry’s role as a major employer of young people and first-time workers.
However, trade bodies warned that job creation cannot be separated from wider cost pressures on operators.
Michael Kill, CEO of the Night Time Industries Association (NTIA), said the £800m headline figure “risks missing the point entirely if the businesses that create jobs are being priced out of existence”.
“You cannot subsidise people into jobs that no longer exist”.
NTIA CEO Michael Kill
“Across hospitality, nightlife and the visitor economy, businesses are facing unprecedented pressures, rising wage costs, higher taxes, increased regulatory burdens and mounting operational expenses. This has already resulted in thousands of job losses, reduced hours and business closures.”
He added: “If even a portion of this £800m were redirected into direct business support, reducing the cost of employment and restoring commercial viability, the job opportunities for young people would follow naturally.”
UKHospitality also welcomed the sector’s inclusion in the expansion of foundation apprenticeships announced alongside the youth employment package. The organisation had previously raised concerns after hospitality was left out of earlier proposals.
‘Clear recognition’
The trade body confirmed that its Hospitality Skills Passport will be integrated into the new framework, giving new entrants a recognised entry standard across the sector.
UKHospitality chair Kate Nicholls said: “This is clear recognition within the Government’s skills policy that hospitality is a vital employer of young people and key to getting people of all ages into employment, offering rewarding work, vital core skills and swift career progression.”
However, she warned that rising operating costs threaten the sector’s ability to grow. “Our ability to meet these goals continues to be stymied by soaring costs, chief among them the recent hike in business rates, which our analysis shows will hit hospitality businesses disproportionately with eye watering increases.
“We need the Government to recognise this and act to avoid this looming catastrophe. Only then will hospitality operators be able to invest and drive job creation in every corner of the UK.”
Conservative shadow work and pensions secretary Helen Whately said the scheme showed the Government had “no plan for growth, no plan to create real jobs”.
