The Labour government has come under fire for a new £820 million initiative designed to move almost one million young people off benefits and into work, with a significant focus on roles in the struggling hospitality sector.
Details of the Work and Welfare Package
Ministers announced the substantial funding package aimed at tackling the rising number of young people not in employment, education, or training (NEETs). The plan includes funding for training and work experience for 350,000 young people on Universal Credit.
Others will be offered 'intensive support' to find employment. From spring 2026, the government will also provide guaranteed jobs for up to 55,000 young people. However, Work and Pensions Secretary Pat McFadden stated that those who refuse to engage with the support without a good reason could face benefit sanctions, emphasising that sitting at home was 'not an option'.
Criticism Over Hospitality Sector Viability
Immediate questions have been raised about the feasibility of creating jobs in bars, restaurants, and pubs, as the industry is in crisis. This follows Labour's increase to National Insurance Contributions (NICs) in the 2024 Budget.
The British Beer and Pub Association (BBPA) has warned that pubs could close at a rate of more than one a day in 2025, estimating 378 pub closures and the loss of 5,600 jobs. This casts doubt on the sector's capacity to absorb new workers.
Conservative shadow work and pensions secretary Helen Whately criticised the scheme, stating: 'The Chancellor's tax hikes are driving up youth unemployment... this scheme is nothing more than taking with one hand to give with the other.' She added that the government could not specify what the roles would be, who would provide them, or their longevity after funding ends.
The Scale of the Youth Unemployment Challenge
The extra funding comes amid a sharp rise in NEETs. Currently, 940,000 young people aged 16-24 are considered NEET, an increase of 195,000 in two years, driven largely by rising sickness and disability rates.
The Resolution Foundation think tank warns this figure is on course to hit one million for the first time since the aftermath of the 2008 financial crisis, when it peaked at 1.2 million in 2012.
In response, the government has outlined further measures. Education Secretary Bridget Phillipson announced a strengthened 'Risk of NEET Indicator' as an early warning system and pilots for automatic enrolment in further education. Former health secretary Alan Milburn will also lead a review into the rising NEET numbers to shape future health and welfare reforms.
While Ministers like Pat McFadden frame the investment as a 'downpayment on young people's futures', the plan's success hinges on an industry already warning of severe strain, creating a significant policy dilemma for the new government.
