Justice minister Claire Ward said new programmes will be established across England and Wales over the next two years in an attempt to reduce re-offending rates.
The £8.4m is not new money but forms part of the youth rehabilitation project.
Under the project youth offending teams (YOTs), alongside local providers of careers, training, education and accommodation advice, will be encouraged to develop comprehensive plans to help these youngsters rebuild their lives.
The most innovative, and effective plans will win part of the £8.4 million pot.
A total of £6m of the cash comes from Youth Crime Action Plan (YCAP) funding spread over two years. A further £2.4m has been contributed by the Youth Justice Board, spread over two years.
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