LONDON, March 15 (Reuters) - Britain will invest an additional 1 billion pounds ($1.3 billion) to create jobs for young people, the government announced on Monday. This initiative aims to reduce the high number of 16- to 24-year-olds who are not in education, employment, or training.
Youth unemployment in Britain has reached a 10-year high, according to figures released last month. The rate surpasses that of other European countries and raises challenging questions for the governing Labour Party regarding its decision to raise the minimum wage.
Work and Pensions Minister Pat McFadden announced that the 1 billion pounds will be invested in grants for companies willing to engage young people, as well as in more subsidised jobs. These measures are expected to help create 200,000 jobs.
He also revealed plans for "the biggest transformation of apprenticeships in a decade," according to the government.
"These measures will provide life-changing opportunities to young people and significantly reverse the increase we inherited in those not in education, employment, or training," McFadden said in a statement ahead of the announcement.
"These reforms will give young people a vital first step on the career ladder and help business leaders recruit the talent that will grow their companies."
Some companies have expressed difficulties affording to hire younger workers, citing increases in the minimum wage alongside rises in employers' social security contributions and other costs.
The government has pledged to end lower minimum pay rates for 18- to 20-year-old workers. The main minimum wage currently stands at 12.21 pounds ($16.40) per hour—up 29% over the past three years—while the rate for 18- to 20-year-olds has risen 46% to 10 pounds per hour over the same period and is set to increase to 10.85 pounds in April.
Official figures released last month showed Britain's jobless rate for people aged 16-24 rose to 16.1% in the final quarter of last year, up from 13.8% in mid-2025 and a record low of under 9.2% during the COVID-19 pandemic.
($1 = 0.7563 pounds)
(Reporting by Elizabeth Piper; Editing by Andrew Heavens)
