UK mandates paid jobs for long-term unemployed youth

Chancellor Rachel Reeves will announce that the UK government will require every young person out of work or education for 18 months to take up a paid job.

Central to Labour’s Youth Guarantee programme, the plan represents one of the most radical attempts in years to address Britain’s persistent rates of long-term youth unemployment. In a speech at the Labour Party conference, Reeves will argue that she is committed to nothing less than the abolition of long-term youth unemployment.

Under the scheme, those aged 16-24 and out of work for at least 18 months would be given a job offer they would have to take. Those who decline could face sanctions, including a reduction in benefits.

Reeves will say the policy is not just about jobs, “It is also about dignity. “We will not allow a generation of young people to languish, without hope or prospects for the future — locked out from security and the fair chance that good work brings,” she will say.

The Labour government is adamant that this is not about punishing the young, but preventing them from being left behind in a shifting economy.

Budget will decide funding and scope

The scheme will be detailed in the Budget on November 26. Ministers will detail whether jobs will be directly funded by the government or subsidised through incentives to employers.

The scheme only applies to those in the specified age group and who have been on Universal Credit for 18 months. That means some groups of people — like young adults not claiming benefits, or the recently unemployed — will not be eligible.

Officials concede that it is hard to be certain that the scheme creates new jobs rather than filling those that would have been taken anyway. Critics fear the government could pay employers to create low-quality jobs with limited long-term value.

For years, unions and business organisations have called on the government to put money into youth jobs. The Trades Union Congress is calling for creating a permanent £1bn-a-year guarantee scheme, akin to those implemented during the 2009 financial crisis and the Covid pandemic.

The British Chambers of Commerce supported the principle of a subsidised jobs scheme but warned that many businesses were struggling with higher national insurance contributions and new employment protections. The group said last week that young people without work history would be left without opportunities unless the government helped cover the cost.

Rain Newton-Smith, chief executive of the CBI, said the plan was crucial for the economy but urged the government to provide more detail. She said the business group wanted to know how the scheme would operate and whether it would address rising employment costs.

Previous schemes shape the current plan

The UK has attempted similar programs in the past. The Future Jobs Fund, introduced in 2009, provided thousands of placements but was scrapped in 2010 as it was deemed too expensive. The Kickstart Scheme was established by Rishi Sunak during the pandemic to stave off a youth jobs crisis, but closed early after fewer than anticipated employers applied.

Reeves is framing this plan as narrower. By prioritising those who have been unemployed or not in education the longest, Labour hopes to break a cycle of exclusion.

Now one in eight 16-to-24-year-olds is not in work, education, or training, and that number has grown by almost a third over the past four years.

The government is already testing elements of the Youth Guarantee in so-called “trailblazer” areas that connect young people with apprenticeships, places at college, or support packages. Ministers also announced earlier this year that £3.8bn of funding would be available to help those with health conditions, making it more difficult for them to move into work.

However, skeptics, including international investors and domestic experts, warn that despite the momentum, serious structural challenges — such as skills shortages, regional inequality, and high cost of hiring — will make progress difficult.

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