The Government is continuing to push policy change to address the significant number of young people not in education, employment, or training. This morning the Department for Work and Pensions published its expanded Youth Guarantee, promising an “additional £1 billion to be invested in grants to help unlock over 200,000 paid jobs for young people”.  

Alongside this DWP has announced their first wave of Apprenticeship Units, as well as the “streamlining” of apprenticeship standards. See below for a breakdown of some of the key changes.  

Key Changes: 

Youth Employment Drive 

The Government has introduced a new “Youth Jobs Grant”, through which businesses will receive up to £3000 for every young person they hire between the ages of 18-24 who has been on Universal Credit and looking for work for at least six months. They have also chosen to expand the “Jobs Guarantee” to young people between the ages of 18-24 (previously applicable for 18-21 year olds). The Jobs Guarantee, initially announced as part of the Youth Guarantee, provides 6 months of paid work, with wraparound support, for young people who have been on Universal Credit and looking for work for 18 months or longer.  

SMEs and Apprentices 

The Government will be providing an additional “Apprenticeship Incentive” of £2000 for each new employee aged 16-24 taken on by an SME. This is on top of support announced in the Autumn Budget, where the Government committed to covering 100% of the training costs for SME apprentices below the age of 25. SMEs will also benefit from National Insurance relief for apprentices under the age of 25.  

Apprenticeship Units  

We have also seen the announcement of the first wave of Apprenticeship Units, due to be available for delivery from April 2026. The units announced today include the following:  

• AI Leadership – Developing AI strategy  
• Electric vehicle charging point installation and maintenance  
• Electrical fitting and assembly  
• Mechanical fitting and assembly  
• Permanent modular building assembly  
• Solay PV installation and maintenance Welding 

Streamlining of Apprenticeships  

While we did see the announcement of a new Level 4 “AI and Automation Practitioner Apprenticeship” standard, we also saw the Government continuing to shape the apprenticeship offer. Namely, we saw a new list of apprenticeships the Government is planning to “streamline”. The sixteen apprenticeship standards listed include popular courses such as the Level 3 Team Leader Apprenticeship and the Level Operations Manager, with 12,670 and 12,530 starts in 2024/25 respectively.  

Why this matters for employers:  

The Government has made their priorities clear; the Skills system will be focused on addressing youth unemployment. Businesses will welcome the additional support for employing young people, but concerns around work readiness and return on investment may continue to plague small businesses looking to take advantage of the new opportunities.  

For Engineering and Manufacturing the new Apprentice Units provide the opportunity to upskill their existing workforce while support the wider industrial strategy agenda. However, the effectiveness of funding, provision and quality assurance procedures concerning apprenticeship units is yet to be determined. We are unlikely to see significant enthusiasm concerning the units until more information is made available.   

What happens next:  

The Government has committed to rolling out the Youth Guarantee, and the Jobs Guarantee Grant, across six areas from Spring 2026. Previous statements have indicated that that successful business applicants will receive notification in April 2026. Given the timeline it is unclear how the Government plans to accommodate the new expanded cohort, but more information will likely be available in the coming months.  

Apprenticeship Units are also due to be available for delivery from April 2026, however we are unlikely to see significant take-up for some time. Providers and employers will need more detail on the delivery and funding requirements before committing to the new format.  

Finally, the Government has stated that the defunding of the apprenticeship standards listed today will not take place before September 2026. DWP told FE Week that the relevant providers will be contacted, and receive reasonable notice before any changes are put in place.  

Our take

Ann Watson, CEO of Enginuity, comments: "Enginuity welcomes this significant investment in youth employment and the Government’s continued commitment to the Youth Guarantee. For sectors such as engineering and manufacturing, strengthening pathways into technical careers is particularly important. Employers across our industries are facing persistent skills shortages at the same time as the UK transitions to new technologies and ways of working, including greater use of digital tools, automation and AI. Supporting more young people into apprenticeships and entry-level roles will be vital to building the skilled workforce needed to drive productivity, innovation and growth.

Measures that support employers to recruit and train young people, particularly SMEs, will play a critical role in making these ambitions a reality. Nearly 90% of engineering and manufacturing employers are small and medium-sized businesses and practical incentives can help give them the confidence to invest in the next generation of talent. Alongside employer support, it will also be important to ensure the wider skills system works effectively for both businesses and young people. Simplifying access to training, maintaining the quality of apprenticeships and ensuring that reforms to the Growth and Skills Levy work for smaller employers will all be key to unlocking the full potential of these reforms.

Through The Policy Centre for Supply Chain and SMEs, Enginuity looks forward to continuing to work with government and industry partners to ensure these initiatives translate into meaningful opportunities for young people, while helping businesses access the skills they need to succeed.”

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