UK Government Unveils Youth Employment Measures as UKHospitality Welcomes Lower Hiring Costs

The UK Government has announced a package of measures to support youth employment and reduce costs for businesses hiring young people, with hospitality industry leaders welcoming the move as a practical response to rising employment costs.

The measures include a £3,000 Youth Jobs Grant for employers hiring young people, designed to operate in a similar way to an employer’s National Insurance Contributions holiday. The initiative is intended to help offset labour costs for sectors such as hospitality, where businesses have faced mounting pressure from higher employment expenses.

In addition, small and medium-sized enterprises will receive £2,000 for each apprentice under 24 they employ, providing direct financial support to encourage apprenticeship hiring.

Hospitality has also been included in foundation apprenticeships, creating another supported pathway into the sector. Employers will be able to recruit and train new entrants with financial assistance designed to reduce both employment and training costs. Students participating in apprenticeships will also be exempt from National Insurance Contributions, further lowering costs for employers taking on early-career workers.

The Government said sector-specific apprenticeship standards across catering and hospitality will be retained, preserving access to training programmes tailored to industry needs. New apprenticeship unit short courses will also be introduced in areas such as electrical fitting and AI leadership to broaden skills development opportunities.

Kate Nicholls, Chair of UKHospitality, said the announcements reflected several proposals put forward by the industry body and would help remove barriers to employment in the hospitality sector.

“Hospitality is the sector best placed to help people back into work, and these are important measures that remove barriers for businesses employing more people,” Nicholls said.

She added that the Government’s £3,000 Youth Jobs Grant was modelled on proposals submitted by UKHospitality and would help address one of the biggest challenges facing operators.

“Acting as the equivalent to an employer NICs holiday for businesses employing young people, the grant helps to address a major cost challenge for hospitality businesses,” she said.

Nicholls also welcomed the inclusion of hospitality in foundation apprenticeships, saying it meant there were now several supported pathways into work, with employers receiving financial support to lower the cost of employment.

“With employment costs rapidly increasing, engaging with the Government to introduce these incentives has been one of our priorities and can genuinely support businesses to reduce the cost of employment,” she said.

She said it was also positive that calls to retain sector-specific standards across catering and hospitality had been acted upon, preserving apprenticeship routes tailored to the sector.

“These announcements show the benefit of working closely with business groups to design measures and policies that are practical, cost-saving and work for businesses,” Nicholls said. “It’s crucial this approach continues and that the Government ensures that people of all ages have routes to learn and develop skills in hospitality.”

The measures were developed in collaboration with industry groups, including the Hospitality and Tourism Skills Board, and are intended to provide businesses with more supported routes to bring young people into employment while managing rising labour costs.

Further implementation details are expected to be confirmed by the Government.