LCCI comment on the Government’s youth employment drive

Monday 16 March 2026

London businesses, particularly SMEs constrained by skills shortages, welcome the Government’s £1 billion youth employment drive to create new jobs and equip more young people with the skills and experience needed for the workplace. 

With nearly one million young people not in education, employment or training, the expansion of the Youth Guarantee and new employer incentives are positive measures that will help more young people into work. Although businesses are navigating a cautious economic climate, many are ready to recruit as conditions improve. Our latest Quarterly Economic Survey found that just a quarter of London firms were actively recruiting at the end of 2025, down from over a third six months earlier. This underlines why continued action to boost employer confidence will be key to unlocking further job opportunities. 

To fully address the capital’s skills gap and support economic growth across the UK, these reforms must form part of a broader strategy that gives employers greater flexibility and reduces complexity. We look forward to reviewing the proposed changes to the Growth and Skills Levy and urge the government to move at pace considering the ongoing challenges facing London businesses. 

Today’s announcement shows important progress, and close partnership between government, businesses and education providers will help ensure these reforms create meaningful opportunities for young people while enabling firms of all sizes to build the skilled workforce needed to drive economic growth.

ENDS