The Chancellor has revealed a sizeable package to combat youth unemployment as he set out the plan to help Britain bounce back from Covid-19. Sunak’s ‘Plan for Jobs’ focused on supporting, protecting and creating jobs across the UK, as the country enters the next phase of recovery following the coronavirus outbreak.
Central to this plan is the £2bn Kickstart Scheme, which aims to create hundreds of thousands of new, high-quality government-subsidised jobs for unemployed young people.
Under the Kickstart scheme, employers will be able to offer a six-month work placement for young people aged between 16-24 who are claiming Universal Credit and at risk of long-term unemployment. The government will fund each “Kickstarter” job covering 100% of the National Minimum Wage for 25 hours a week – and employers will be able to top up this wage. The jobs will give young people the opportunity to build their skills in the workplace, and to gain experience that will improve their chances of going on to find long-term sustainable work.
The Chancellor also announced:
Businesses will receive a £1,000 bonus payment from the Government for every trainee they offer a work experience placement to.
Businesses will be given £2,000 for each new apprentice they hire under the age of 25. This is in addition to the existing £1,000 payment the Government already provides for new 16-18-year-old apprentices and those aged under 25 with an Education, Health and Care Plan.
AELP’s initial response
Association of Employment and Learning Providers chief executive Mark Dawe said:
“The Chancellor clearly understands that apprenticeships work and give real jobs to young people with high quality training. The scale of the challenge means that a financial incentive was an absolute necessity to get more employers on board and we believe that today’s announcements will help achieve that aim. As he said, we can’t lose this generation of young people.
The big question is will a young person on the Kickstart scheme be able to start an apprenticeship on day one? Without this, the incentives for Kickstart will wipe out new starts for apprenticeships for the 18 month duration of this very attractive offer of wage support - a very unintended consequence. AELP will be seeking clarity on this as a matter of urgency.
The advantage of apprenticeships and what Mr Sunak rightly labelled ‘proven’ traineeships is that providers can work closely with employers so that they available in a big city like Liverpool and in a tiny hamlet in Cornwall. Young people don’t have to travel for miles to access training. AELP looks forward to working with government officials on the details to ensure that not a penny of the new investment is wasted but tripling the number of traineeships is a fantastic first step.
In common with other teenage learners, it is about time that the training costs of 16 to 18 year old apprentices were met fully again by the DfE’s mainstream budgets instead of being funded out of the levy.”
Updated response after seeking clarity
On Wednesday afternoon after the Chancellor’s speech, AELP had very constructive discussions with the Treasury about the jobs and skills plan. These confirmed that the Prime Minister and Rishi Sunak are totally committed to improving young people’s skills to secure sustainable employment.
Regarding the concern that the Kickstart scheme incentives for employers might crowd out new apprenticeship starts, it was made clear the scheme was being aimed at young people with limited skills who are the start of their journey. The DWP scheme is designed for the young person to work with Jobcentre work coaches and providers over the first 13 weeks to make them work ready and then place the person on to a work placement for a further 13 weeks with the aim of the employer offering full-time employment and an apprenticeship at the end. A young person on Kickstart can’t start an apprenticeship while on the scheme.
AELP’s Mark Dawe added:
“To borrow the Prime Minister’s words, it appears that the government is using both traineeships and Kickstart to principally target young people in the NEET group and make them ‘oven-ready’ for the world of work and a full apprenticeship. We welcome the clarification which will help providers plan their provision for September.
“Ultimately the take-up for these programmes will be determined by employers but AELP is very pleased that skills for young people are now on the top table in terms of the government’s priorities. This week has seen some very positive developments and providers are ready to play a major part in supporting them.”
Link to Treasury’s Red Book of 8 July 2020: https://www.gov.uk/government/publications/a-plan-for-jobs-documents