Young people who have been out of work or education for 18 months will be guaranteed a paid job placement under new government plans, with ministers pledging to end long-term youth unemployment.
But the announcement has prompted debate about how the scheme will be delivered in practice, and what role employers and HR teams will be expected to play.
The Youth Guarantee, announced by Chancellor Rachel Reeves at the Labour Party Conference in Liverpool on Monday, will offer paid work to every eligible person on Universal Credit who has not been “earning or learning” for a year and a half.
Those who refuse without good reason could lose their benefits. Reeves said the scheme aimed to provide “real work” with “practical experience and new skills”, echoing the previous Labour government’s New Deal for Young People introduced in 1998.
Concerns over implementation
The Department for Work and Pensions will oversee delivery, building on existing employment support and sector-based work academies. But the details of how placements will be arranged, and how costs will be shared between government and employers, are not yet clear. Reeves confirmed the scheme would be funded from existing budgets, with subsidies available for participating firms, but specifics will not be announced until the Budget in November.
“Every young person will be guaranteed either a place in a college, for those who want to continue their studies, or an apprenticeship, to help them learn a trade vital to our plans to rebuild the country, or one-to-one support to find a job,” Reeves said.
“But more than that, our guarantee will ensure that any young person out of work for 18 months will be given a paid work placement. Real work, practical experience, and new skills.”
Business groups have expressed both support and caution. The Federation of Small Businesses (FSB) described the initiative as “hugely important”, but policy chair Tina McKenzie warned it must be designed inclusively, with safeguards for those with health conditions and flexibility for small firms.
Questions also remain about whether employers already grappling with higher National Insurance costs and rises in the National Minimum Wage will be able to take on significant numbers of new placements.
Shadow chancellor Sir Mel Stride criticised the plan, saying the chancellor “wants to abolish youth unemployment, yet in her very first budget she introduced a £25 billion jobs tax that made it more expensive for businesses to hire, especially young people”.
Kate Shoesmith, deputy chief executive of the Recruitment and Employment Confederation, said past experience showed that youth employment programmes often failed due to a lack of input from the people they aimed to help.
“We know from experience that schemes to get young people into work succeed only when we design them with young people, not impose them,” she said.
“We must treat temporary and flexible jobs as effective routes to build confidence and skills, which then leads to long-term work. To make such job schemes deliver, we must also reform the skills levy so employers can provide training and progression along the way.”
Youth unemployment at 11-year high
The policy comes at a time when almost one million young people in the UK are not in employment, education or training. Official figures show that 987,000 16 to 24-year-olds were in this category at the end of last year, the highest level since 2013.
Reeves said she was determined to “abolish long-term youth unemployment”, declaring that it was “bad for business, bad for taxpayers, bad for our economy, and it scars people’s prospects throughout their lives”.
Labour Together, a think tank influential in shaping party policy, has argued that contribution should be central to the government’s social and economic agenda. Reeves echoed this in her speech, saying she wanted to build “a Britain founded on contribution – where we do our duty for each other, and where hard work is matched by fair reward”.
Employer and HR responsibilities
If the Youth Guarantee is to succeed, HR departments will be on the frontline of delivery. Employers hosting placements will need to provide meaningful work, supervision and support that enables participants to develop skills and confidence. Recruitment processes will have to balance inclusivity with operational capacity, and HR teams will play a key role in ensuring compliance with employment law and benefit rules.
The National Franchised Dealers Association (NFDA), representing the UK’s automotive retail sector, said the guarantee could also help industries facing skills shortages. Chief executive Sue Robinson noted that the sector “offers a wide range of entry-level opportunities and apprenticeships” and welcomed the potential to attract young workers.
“Through our Drive My Career initiative, we have consistently promoted the career paths available to young people in the automotive retail industry,” she said. “This new government scheme has the potential not only to support young people into meaningful employment, but also to help the sector attract the next generation of skilled workers.”
Robinson added that the NFDA would be pressing the government at the Labour Party Conference “for reform of the Apprenticeship Levy to allow greater flexibility, enabling employers to better invest in training”.
Lessons from previous schemes
The government has positioned the Youth Guarantee as a successor to Labour’s earlier New Deal, which combined training, education and job opportunities for unemployed young people. Evaluations at the time suggested the programme helped reduce long-term unemployment but also faced criticism about sustainability of outcomes.
More recently, the Conservative government’s Kickstart scheme during the pandemic placed thousands of young people into temporary jobs, though take-up among employers was uneven.
Clear guidance, strong partnership with jobcentres and investment in mentoring will be needed to avoid repeating past shortcomings, observers say. Employers may also need reassurance about how subsidies will work and what obligations they will carry if placements do not lead to permanent roles.
Wider workforce impact
The initiative has implications beyond youth employment. Some business groups have warned that focusing narrowly on 18- to 21-year-olds risks neglecting older jobseekers with barriers to work, including those with health conditions. The FSB has urged ministers to ensure there is a “backstop” for over-25s who have been out of work long-term.
The challenge for HR departments will be to integrate placements into existing workforce strategies without creating tensions between permanent staff and temporary recruits. Ensuring fairness, clear communication and a supportive environment will be vital if the scheme is to enhance workplace culture rather than undermine it.
Balancing ambition with reality
Reeves is pitching the Youth Guarantee as part of a broader economic strategy centred on fairness, contribution and growth. She insists the policy will not add to government borrowing, with funding drawn from budgets already set out in the spending review. Economists, however, warn that the chancellor faces a difficult Budget in November, with pressure to balance the books while also investing in growth.
Whether the Youth Guarantee achieves its aim will depend on the details to come. For now, HR professionals and employers are being asked to prepare for a policy that could reshape entry-level recruitment and support for young people. The promise of ending long-term youth unemployment is ambitious – but its success will rest heavily on how effectively businesses and HR teams are brought into the fold.
