The government’s new £1 billion youth employment drive, designed to create 200,000 jobs and apprenticeships, is a positive step. Any serious effort to get young people into work deserves recognition. But if we’re honest about the scale of the problem, the reality is this: we’re still tinkering around the edges.

The UK has been playing catch-up on vocational training and apprenticeships for decades. A few incentives and grants are welcome, but they won’t solve the structural issues that have left too many young people without a clear pathway into skilled work.

A generation at risk of being left behind

Almost one million young people in the UK are currently not in education, employment or training. That number has risen sharply in recent years, and it should worry everyone. For young people, being locked out of the workforce early can have lifelong consequences. It affects earnings, confidence, and long-term career prospects.

For businesses, it means a shrinking talent pipeline at a time when many sectors are already struggling with skills shortages. And for the wider economy, it represents lost productivity and wasted potential.

The government’s Youth Jobs Grant and apprenticeship incentives may help unlock opportunities, particularly for smaller businesses. Offering £3,000 to employers who hire young people and £2,000 to support apprenticeships will certainly encourage some companies to take a chance on new recruits. However, the scale of the challenge demands something much bigger.

Apprenticeships must be at the centre of the solution

For years I’ve been arguing that apprenticeships are the single most effective way to tackle youth unemployment while also solving the UK’s skills gap.

They give young people a route into skilled careers without racking up university debt. They allow businesses to train workers in the exact skills they need. And they strengthen industries that rely on technical expertise.

The problem is that the apprenticeship system has been steadily weakened over time. Starts among young people have fallen by around 40 percent in the past decade. That should be ringing alarm bells. What we need is a fully funded apprenticeship programme that genuinely empowers small and medium-sized businesses to take on more young people.

A smarter way to fund apprenticeships

One idea I’ve long supported is simple. Instead of paying jobseekers’ allowance or Universal Credit to young people who are unemployed, that money should be redirected into apprenticeship wages. In other words, fund the job instead of funding the unemployment.

If employers were able to use that support directly to pay apprentices, it would remove much of the financial risk for small businesses. It would also ensure that young people gain real skills and real work experience instead of remaining stuck outside the labour market.

The government’s current scheme only covers part of those costs, which means many SMEs will still struggle to make the numbers work.

Businesses want to help, but they need proper backing

Small businesses across the UK are desperate for skilled workers. At the same time, many young people are desperate for opportunities. The missing piece is a system that properly connects the two. That means long-term investment in apprenticeships, less bureaucracy for employers, and funding models that genuinely support small businesses to train the next generation. The government’s announcement shows that youth employment is finally being taken seriously again, which is welcome.

But if we want to rebuild the UK’s skills base and give young people the future they deserve, this needs to be the start of a much bigger conversation. Right now, it’s a step in the right direction, but the steps are still far too far apart.