Somerset County Council and Connexions Somerset won the cash, from the Department of Children, Schools and Families, for their successful work with Neets over the past three years.
Between 2006 and 2009, the percentage of local Neets aged between 16 and 18 fell from 4.8 per cent to 3.8 per cent. The county's Neets rate is now nearly half the national average.
Rachel Bendall, chief executive of Connexions Somerset, said the money would fund new youth projects to help young offenders, teenage parents and those leaving the care system.
She said: "Staff have worked tirelessly including weekends and evenings to ensure that all young people maximised the opportunities available to them, and to support young people to realise their potential. This reward is a credit to all their hard work."
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