Young people could lose their right to universal credit if they refuse to engage with help from a new scheme without good reason, the government has warned.

Almost one million will gain from plans to get them off benefits and into the workforce, according to officials.

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It comes as the number of young people not in employment, education or training (NEET) has risen by more than a quarter since the COVID pandemic, with around 940,000 16 to 24-year-olds considered as NEET as of September this year, said the Office for National Statistics.

That is an increase of 195,000 in the last two years, mainly driven by increasing sickness and disability rates.

The £820m package includes funding to create 350,000 new workplace opportunities, including training and work experience, which will be offered in industries including construction, hospitality and healthcare.

Around 900,000 people on universal credit will be given a “dedicated work support session”.

That will be followed by four weeks of “intensive support” to help them find work in one of up to six “pathways”, which are: work, work experience, apprenticeships, wider training, learning, or a workplace training programme with a guaranteed interview at the end.

However, Work and Pensions Secretary Pat McFadden has warned that young people could lose some of their benefits if they refuse to engage with the scheme without good reason.

“Doing nothing should not be an option,” he told Sky News’ Sunday Morning with Trevor Phillips.

“If someone just took that attitude, yes, they would then be subject to, you know, the obligations that are already part of the system.”

“What I want to see is young people in the habit of getting up in the morning, doing the right thing, going to work,” he added.

“That experience of that obligation, but also the sense of pride and purpose that comes with having a job.”

Read more from Sky News:
Child poverty strategy unveiled – but not everyone’s happy
Universal credit claimants soar by over million in a year

The government says these pathways will be delivered in coordination with employers, while government-backed guaranteed jobs will be provided for up to 55,000 young people from spring 2026, but only in those areas with the highest need.

However, shadow work and pensions secretary Helen Whately, from the Conservatives, said the scheme is “an admission the government has no plan for growth, no plan to create real jobs, and no way of measuring whether any of this money delivers results”.

She told Sky News the proposals are a “classic Labour approach” for tackling youth unemployment.

“What we’ve seen today announced by the government is funding the best part of £1bn on work placements, and government-created jobs for young people. That sounds all very well,” she told Sunday Morning with Trevor Phillips.

“But the fact is, and that’s the absurdity of it is, just two weeks ago, we had a budget from the chancellor, which is expected to destroy 200,000 jobs.

“So the problem we have here is a government whose policies are destroying jobs, destroying opportunities for young people, now saying they’re going to spend taxpayers’ money on creating work placements. It’s just simply the wrong answer.”

Ms Whately also said the government needs to tackle people who are unmotivated to work at all, and agreed with Mr McFadden on taking away the right to universal credit if they refuse opportunities to work.

But she said the “main reason” young people are out of work is because “they’re moving on to sickness benefits”.

Ms Whately also pointed to the government’s diminished attempt to slash benefits earlier in the year, where planned welfare cuts were significantly scaled down after opposition from their own MPs.

The funding will also expand youth hubs to help provide advice on writing CVs or seeking training, and also provide housing and mental health support.

Some £34m from the funding will be used to launch a new “Risk of NEET indicator tool”, aimed at identifying those young people who need support before they leave education and become unemployed.

Monitoring of attendance in further education will be bolstered, and automatic enrolment in further education will also be piloted for young people without a place.