Youth unemployment drops below one million as Labour expands jobs scheme

NEET figures dip below one million

The Office for National Statistics said the number of 16‑ to 24‑year‑olds not in employment, education or training fell to about 981,000 in the three months to June 2026, down from 1,012,000 in the previous quarter. The modest decline follows months of alarm about a stagnant jobs market and a five‑year low in vacancy levels.

Analysts warn that a large pool of young people outside work or study can drag on growth, with the youth‑unemployment crisis estimated to cost the economy roughly £125 billion a year, according to the Neets tsar Alan Milburn. Reducing that figure is a key reason the government is keen to boost entry‑level opportunities.

Labour rolls out expanded Youth Jobs Guarantee

Andy Burnham has made tackling youth inactivity a cornerstone of his premiership. Over the past month he expanded the Labour Youth Jobs Guarantee, offering firms a £2,000 incentive to hire young workers and guaranteeing six months of paid work for Universal Credit claimants. The scheme will now be rolled out in areas with the highest youth‑unemployment rates, including Essex, Greater Manchester and Birmingham.

Pat McFadden, work and pensions secretary, said the government was "determined to turn the tide on the youth unemployment crisis" and highlighted a £2.5 billion investment aimed at creating almost a million opportunities to earn or learn.

We are determined to turn the tide on the youth unemployment crisis, and our wider £2.5bn investment will help create almost a million opportunities to earn or learn.

For more on Burnham's business agenda, see his recent pledge to ease costs for employers Burnham's pledge to ease business costs.

Opposition questions and broader debate

The Home Office reported 235,000 work visas and 383,000 study visas were issued in the year to June, a figure Reform UK has used to argue that high youth unemployment is linked to immigration levels. The party says making it cheaper to hire British workers should be a priority.

The Tory opposition also blames tax pressures on employers for the shortage of junior roles. Helen Whately, who shadows McFadden, said: "Something has gone badly wrong for a generation of young people. The opportunities that previous generations took for granted are not there in the way they once were. Labour have destroyed job opportunities for young people with their jobs tax and employment red tape."

Milburn is set to publish a review of the crisis in the coming weeks, which is expected to shape future funding for apprenticeships and possibly tighten the link between visa policy and domestic job creation.

Whether the expanded guarantee can sustain the downward trend in NEETs will depend on firms taking up the incentives and on the broader economic environment, which remains uncertain as vacancy rates stay low.