The announcements also included a new investigations team to go after fraudulent Bounce Back Loan claimants and Public Procurement.

Youth Guarantee 

Every eligible young person who has been on Universal Credit for 18 months without earning or learning will be offered guaranteed paid work through a new Youth Guarantee. This new initiative will build upon existing employment support and sector-based work academies currently being delivered by the Department for Work and Pensions. The scheme forms part of the government’s aim to provide targeted support for young people at risk of long-term unemployment.   

The Youth Guarantee will include a targeted backstop, where every eligible unemployed young person on Universal Credit for 18 months without earning or learning will be provided guaranteed paid work. Participants of the scheme will receive support to take advantage of available opportunities, with the aim of helping them transition into regular employment.   

Covid fraud

As part of the Chancellor’s plans to recover lost Covid funds it was confirmed that a new investigations team will go after fraudulent Bounce Back Loan claimants. Claimants who have yet to respond to the voluntary repayment scheme risk court. New powers for the government will make detection easier and allow the government to levy civil penalties, which will ensure that those who have defrauded the taxpayer face the consequences. 

Public procurement  

Plans to reform public procurement to back British suppliers – supporting economic growth, creating jobs and providing British businesses with greater security – have also been announced. 

Following a consultation on public procurement process, the government will support businesses that make and invest in Britain by legislating for a new economic security power when parliamentary time allows. This would help protect our national security interests, that will create new flexibilities for awarding contracts in key sectors, including shipbuilding. The purpose of this power would be to protect our national security. This will help contribute to safeguard UK jobs and strengthen domestic manufacturing.   

The reforms harness the government’s £385 billion annual procurement spend as a strategic lever to protect supply chains, create opportunities for local businesses and social enterprises, and deliver greater value for taxpayers. Across strategically important sectors essential for our economic security and to protect our national security, British jobs, skills and manufacturing will be prioritised when the government procures from businesses.   

Shipbuilding is a key sector set to benefit, with weight given to British firms for government vessel contracts. The Ministry of Defence will create an Action Plan for Shipbuilding and Maritime Technology which will allow us to seize on these new procurement powers and emerging opportunities. This will protect jobs in UK shipyards and rebuild Britain’s shipbuilding capabilities. This follows the recent announcement of the UK’s biggest ever warship export deal with Norway worth £10 billion – supporting over 4,000 UK jobs and delivering on the government’s Plan for Change.  

Sector Reaction

Sue Robinson, Chief Executive of the NFDA, commented:

“NFDA welcomes the Government’s plan to tackle youth unemployment and help bridge the growing skills gap. The automotive sector offers a wide range of entry-level opportunities and apprenticeships across several areas.

“Through our Drive My Career initiative, we have consistently promoted the career paths available to young people in the automotive retail industry. This new Government scheme has the potential not only to support young people into meaningful employment, but also to help the sector attract the next generation of skilled workers.

“It is also encouraging to hear the Chancellor directly recognise the role of the automotive industry in rebuilding the economy, including the mention of financial support for Jaguar Land Rover. It is essential that JLR receives meaningful support so the dealer network affected by the knock-on effects of the cyber-attack can recover.

“At the Labour Party Conference, NFDA will also lobby for reform of the Apprenticeship Levy to allow greater flexibility, enabling employers to better invest in training.”

Stephen Evans, CEO of Learning and Work Institute, said:

“This is a welcome announcement that can make a real difference. But we need more details on the length and type of placements. And with only one in four Neets on benefits and required to search for work, it’s important this offer is open to all young people who need it, regardless of their benefit status.”

Michael Lemin, Head of Policy at NCFE, said:

“We welcome the Government’s plan to develop the Youth Guarantee, which will be an essential component of helping young people into work. We are pleased that the Government are listening to the sector and taking action, and the offer of guaranteed, paid work will be most welcome to many people. However, this will only be available to those who have been out of work or training for 18 months. More still needs to be done to help people at an earlier stage.

“Withholding benefits is one of the most powerful levers available to Government to encourage people to engage, but this must be managed carefully. There are many reasons that people become NEET, and it will be vital to ensure that services are joined up so people are not unfairly penalised. Young parents, for example, may require childcare for paid work, or carers may need to ensure their loved ones are cared for before taking a paid work placement.

“The NEET issue is a multifaceted one that will require joined-up policy making across skills, employment, and health. This latest development is not a silver bullet, but it could be a welcome step towards a solution if more action follows.”

Simon Ashworth, Deputy Chief Executive and Director of Policy at AELP said:

“It is positive to see that the government is planning to move forward with greater investment and new promises to their existing Youth Guarantee programme, and we look forward to finding out the specifics and the level of support in the upcoming Autumn Budget. However, with nearly a million young people who are NEET, we urge the government to be bolder, go further, and avoid creating hollow promises to eradicate youth unemployment in this country. The intervention required needs to materially change the trajectories for hundreds of thousands of young people to avoid the risk of looking performative.

“On the face of it, the early narrative already appears to be too narrow, potentially complex in its eligibility criteria and talk of the guaranteed work placements being used as a ‘targeted back stop option’ lacks the required ambition.  The government needs to tackle this crisis head-on, ensuring employers are galvanised through appropriate financial incentives, and each guaranteed work placement includes a programme of high-quality training.”

Sarah Beale, CEO AAT said:

“AAT welcomes the Chancellor’s announcement to guarantee a job or training place for every young person not in education, employment or training. With over 900,000 NEETs across the UK, this commitment is a positive step toward tackling long-standing barriers to opportunity, reducing youth unemployment and supporting inclusive economic growth.

“It’s essential that this pledge is backed by sustained investment, clear implementation plans, and meaningful partnerships with employers and training providers to broaden access. It is imperative that employers are support properly to help provide this opportunity, and simple asked to do more.

“High-quality, work-relevant training, such as apprenticeships and technical qualifications, can offer life-changing pathways, especially in professions like accountancy, where demand for skilled technicians continues to grow. AAT looks forward to working with the Government to ensure that young people are not just given options, but real, rewarding opportunities that help them thrive in the workforce.”

Responding to the Chancellor’s new youth guarantee, the Recruitment and Employment Confederation (REC) Deputy Chief Executive Kate Shoesmith said:

“We know from experience that schemes to get young people into work succeed only when we design them with young people, not impose them. That way, businesses offering opportunities connect with young people ready to take them up. In Kickstart, employers stepped up but bureaucracy blocked thousands of placements. We must treat temporary and flexible jobs as effective routes to build confidence and skills, which then leads to long-term work. To make such job schemes deliver, we must also reform the skills levy so employers can provide training and progression along the way.”

Further information  

Youth Guarantee

• This will be funded from within existing budgets. We will set out details at Budget 2025.  
• Delivery will be led by the Department for Work and Pensions, building on existing employment support and sectoral work placements.  
• Further details, including eligibility criteria and the structure of placements, will be confirmed at the Autumn Budget following further engagement including with employers and the Devolved Governments.  

Covid enforcement

• People who still owe Covid scheme money will be pursued by a new fraud investigations team armed with new powers to issue huge fines  
• The new unit will make sure that fraudulent loan claimants face investigation, disqualification, and compensation orders if they fail to use the voluntary repayment scheme.  
• The voluntary repayment window opened in September, giving individuals and businesses until December 2025 to make a plan to return pandemic money. The scheme is the last chance for people who wrongly claimed support to clear their conscience before the tougher sanctions follow.  
• The new unit will be armed with enhanced powers and the ability to issue fines of up to 100% of the value of an outstanding loan to suspected fraudsters.  
• Recent successful prosecutions demonstrate the government’s determination to recover public funds. A London fraudster was jailed for using £130,000 in fraudulent loans to fund trading operations in Ghana, and a Yorkshire businessman was ordered to repay over £115,000 after falsely claiming his scaffolding company had half a million pounds turnover.  
• The Insolvency Service has already secured over 2,000 director disqualifications and 62 criminal convictions related to Covid support scheme abuse.  
• Meanwhile another £8 million of suspected fraud has been reported through the Covid fraud reporting website since its launch in September.  
• The new investigations team will initially run as a test and learn pilot, backed with £17.5 million of new money to ensure that those who exploited the system face the consequences.