Young people out of work or training for a year will get a guaranteed six-month job starting in November. Pat McFadden said, "People need more certainty about what they are entitled to." The government aims to help 90,000 people into work by March 2029 to support this lost generation.
Work and pensions secretary lays out plan to address 'lost generation' ahead of changes to unemployment support
Young people not in work or training will be guaranteed a six-month job from November, ahead of sweeping changes to youth unemployment support expected to be recommended this week.
Pat McFadden, the work and pensions secretary, said on Sunday that the government would expand a trial scheme nationwide from late November and give 18- to 24-year-olds a legal guarantee of work from April after 12 months of unemployment, with the aim of getting 90,000 into jobs by March 2029.
"People need more certainty about what they are entitled to," McFadden told the BBC on Sunday, indicating the government would legislate to make the guarantee permanent. Eligible claimants currently have to wait 18 months before being offered a role.
The changes come as a long-awaited review by former Labour health secretary Alan Milburn is set to be published on Tuesday, which is expected to recommend reducing entitlements to benefits for out-of-work young people.
Milburn acknowledged on Sunday that the upfront investment in his plan, which aims to tackle the rising number of so-called Neets -- young people not in employment, education or training -- meant the benefits bill would not fall for 10 years, but argued that increased spending was necessary.
"This is a 10-year plan . . . everybody thinks wave a magic wand, snap your fingers, and you can do it in two or three years. I'm telling you, you can't," Milburn said, suggesting it could cost "billions" initially.
"If you do crude cuts in benefits, all that happens is that young people show up somewhere else on the government ledger."
The government has warned that cutting the welfare bill without additional support would put strain on other services such as the NHS.
The number of Neets has jumped to almost 1mn and has reached 15.2 per cent of the 18-24 population, higher than the EU average and up from nearly 11 per cent in 2021. Ministers have warned of a "lost generation", with higher rates of mental health issues such as anxiety.
Milburn said the aim was to get the amount spent on benefits for young people versus employment support down to a ratio of 2:1 from 25:1 currently. "It's not a question of whether we spend money, it's how we spend it," he added.
Prime Minister Andy Burnham may still face a fight with backbench Labour MPs depending on the details of the plan. A rebellion over welfare cuts last year undermined Sir Keir Starmer's authority.
Under the guaranteed jobs scheme, the government said it would fully fund up to 25 hours of paid work a week for six months at the relevant minimum wage. There will also be grants of £3,000 for hiring Neets.
The Tourism Alliance, an industry body, said on Sunday it aimed to create 50,000 jobs for Neets by 2029.
"One thing we're looking at is how do we make it more financially attractive for employers to take on young people," Milburn told the BBC.
Parties on the right have criticised Labour's plans, arguing the government would be better cutting employers' national insurance to encourage more hiring. Conservative leader Kemi Badenoch pledged last week to halve employers' NI contributions for 21- to 24-year-olds.
Karim Fatehi, chief executive of the London Chamber of Commerce and Industry, said: "The fundamental reset Pat McFadden has described must include reducing hiring costs."