08 Jul 2026
Targeted subsidies, rather than expensive tax breaks, are the most cost-effective way of supporting employers to get young people into work, according to Resolution Foundation analysis.
The think tanks warns that the number of young people not in employment, education or training (NEET) passed one million earlier this year. It says this is a crisis that risks scarring the living standards of a generation.
A range of solutions have been proposed to encourage firms to hire more young people. But a Resolution Foundation report shows that there is a vast gulf in their cost-effectiveness.
The report estimated that the Youth Jobs Grant, which offers firms £3,000 to hire an 18-24-year-old who has been on Universal Credit for six months or more, will create 2,800 additional jobs at a cost of around £36,700 each.
The Jobs Guarantee, which funds six months' part-time employment for those out of work for at least 18 months, comes in at roughly £38,000 per additional job, making it three-and-a half times cheaper than scrapping employer National Insurance contributions (NICs).
Lindsay Judge, Research Director at the Resolution Foundation, said: 'One million young people outside of work, education or training is a sobering milestone – the highest figure for 13 years, and a reality that risks lasting damage to the life chances of a generation. But reaching for employer tax cuts to resolve this doesn't add up.'