Starmer hosted a roundtable at Downing Street with hospitality leaders earlier today (29 June), including UKHospitality chief executive Allen Simpson and representatives from major operators including Fuller’s, Burger King, KFC and Costa Coffee.
Work and Pensions Secretary Pat McFadden was also present at the meeting, which focused on how hospitality can help young people facing barriers to employment, training and education.
The youth jobs grant will be available to businesses hiring 18 to 24 year olds who have been on Universal Credit for six months or more.
The grant was first set out earlier this year as part of a wider youth employment package, alongside foundation apprenticeships in hospitality and retail and an expansion of the jobs guarantee to 18 to 24 year olds.
‘£3k incentive’
Starmer 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 the measure formed part of a wider approach to support young people into work, alongside a Youth Guarantee and greater focus on technical education, skills and apprenticeships.
The Prime Minister said university should not be seen as the only route to success and said the Government wanted more young people to access high level skills routes.
He said: “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.”
The Government said the roundtable was an opportunity for hospitality organisations to share first hand experience of existing employment schemes and how they could be improved.
The sector has long positioned itself as a major employer of young people, offering first jobs, training and career progression across pubs, restaurants, hotels and quick service businesses.
Trade bodies previously welcomed the grant as a way to reduce the cost of hiring young people, but warned the wider policy environment must not make it harder for operators to create entry level roles.
However, operators have repeatedly warned rising employment costs, including national living wage increases and employer national insurance contributions, are putting pressure on recruitment and staffing budgets.
Jobs guarantee
The £3,000 grant will sit alongside the Government’s jobs guarantee, which funds six months of part-time employment for people who have been out of work for at least 18 months.
Starmer said the guarantee was “probably the single most effective way to help people” into work.
He added that getting people into work was often the critical first step, with many then able to remain in employment.
A Resolution Foundation report estimated the youth jobs grant would create 2,800 additional jobs at a cost of around £36,700 each.
It also estimated the jobs guarantee would cost around £38,000 per additional job.
