To address youth unemployment the Government has launched a ‘Kickstart’ scheme as part of their ‘Plan for Jobs’ worth £2bn. The scheme will provide fully subsidised, six month job placements for 16 – 24 year olds, plus set-up costs, training and support to help young employees move into sustained employment.
Chancellor Aims to Address Youth Unemployment
The landmark Kickstart scheme is providing funding to employers to address youth unemployment by creating new, six month job placements for young people, who otherwise face long-term unemployment, as a result of the outbreak of Covid-19.
As part of the Chancellor’s ‘Plan for Jobs’, the Kickstart scheme aims to create hundreds and thousands of new, fully funded jobs across England, Scotland and Wales to address youth unemployment. The first placements are likely to be available from November.
In 2020 more than 700,000 young people are set to leave education and enter the job market. Yet since March, when the UK’s full lockdown was introduced, a quarter of a million more people aged under 25 have been claiming unemployment benefits.
The scheme aims to create government-subsidised jobs across the UK for 16 – 24 year olds who are currently on Universal Credit and at risk of long-term unemployment.
For each job placement created under the scheme, employers will receive:
- All of the relevant National Minimum Wage and pension contributions for 25 hours a week
- Associated employer National Insurance contributions
- Employer minimum automatic enrolment contributions
After completing a six month placement, there will be extra funding support to help young people build their experience and help them move into sustained employment to address youth unemployment.
Kickstart Scheme to Address Youth Unemployment
Chancellor Rishi Sunak said: ‘This isn’t just about kickstarting our country’s economy – it is an opportunity to kickstart the careers of thousands of young people who could otherwise be left behind as a result of the pandemic.
‘Businesses of all sizes looking to create quality jobs for young people can apply and there is no cap on the number of places. Household names including Tesco have already pledged to offer Kickstart jobs.’
Employers will be able to top up this wage, while the government will also pay employers £1500 to set up support and training for people on a Kickstart placement, as well as helping pay for uniforms and other set up costs. The jobs will give young people – who are more likely to have been furloughed, with many working in sectors disproportionately hit by the pandemic – the opportunity to build their skills in the workplace and to gain experience to improve their chances of finding long-term work.
As of July, there were almost 538,000 young people aged 24 and under on universal credit. Young people are also more likely to have been furloughed than the general population (47% compared to 32%).
Youth Hardest Hit by Unemployment
ONS figures released today demonstrate that “there has been a large decrease in the number of young people (those aged 16 to 24 years) in employment over the last quarter.”
Young people are among the hardest hit by a fall in their income due to lockdown measures because a larger percentage of their money is spent on essentials, according to ONS. With little in savings and less chance to cut spending, the under-30s would be hit hardest by this, says the Office for National Statistics (ONS) which has calculated the effect of the coronavirus outbreak on household spending.
It found that a typical household in the UK normally spent an average of £182 a week on activities, such as travel, holidays and meals out, that have been mostly ruled out under health guidance during the virus outbreak. This is equivalent to 22% of a usual weekly budget of £831.
Many households have been saving that money instead or using it to cover any loss of income. Thousands of people have lost their jobs and millions have received only 80% of their usual wages as they have been furloughed. Over 7.5 million people had been furloughed in the UK by the end of May, while another 2.5 million self-employed workers have applied for grants to cover their losses.
History shows that school leavers like her are usually hardest hit financially following a recession. Many suffer longer spells of unemployment, and slower pay rises, than people with degrees. Kathleen Henehan, a research analyst at the Resolution Foundation, says many graduates “traded down” into jobs in retail, hotels and the travel industry during the last financial crisis. This forced some school leavers into part-time work and jobs where they were less likely to be promoted quickly. But Ms Henehan says many of these sectors are now shut down, leaving everyone with fewer options. “In other words, the first rung of the employment ladder looks to be
broken,” she says. Furthermore this stalemate exacerbates the already huge number of young people unable to move out of their parental homes.
Kickstart to Boost to Youth Career Opportunities
To address youth unemployment, young people will be referred into the new roles through their Jobcentre Plus work coach with the first Kickstarts expected to begin at the start of November. The scheme, which will be delivered by the Department for Work and Pensions will initially be open until December 2021, with the option of being extended.
Young people can find out more about the Kickstart Scheme at the jobhelp site.
The aim is to give young people – who are more likely to have been furloughed, with many working in sectors disproportionately hit by the pandemic – the opportunity to build their skills in the workplace and to gain experience to improve their chances of finding long-term work.
Secretary of State for Work and Pensions, Therese Coffey says, “Young people taking part will receive on-the-job training, skills development and mentoring, as we get them on that first rung of the jobs ladder and on their way to successful careers.”
To address youth unemployment with a large scale uptake to the Kickstart scheme, the Treasury has said that employer applications must be for a minimum of 30 job placements. However businesses which are only able to offer one or two job placements can partner up with other organisations, such as similar employers, local authorities, trade bodies or registered charities, to reach the minimum number. The intermediary applying on behalf of a group of employers is then eligible for £300 of funding to support with the associated administrative costs of bringing together these employers.
For example a Local Authority or Chamber of Commerce could produce the bid for 30 or more placements on behalf of several businesses to fulfil the minimum quota of thirty placements. This aims to make the process easier and less labour intensive for smaller companies who only want to hire one or two Kickstarters.
The Chancellor’s Plan for Jobs, announced initially in July sets out the biggest package of support for youth unemployment in decades – including tripling the number of traineeships, incentivising employers to hire more apprentices through a £2,000 payment to employers for every apprentice they hire under the age of 25 and investing in our National Careers Service so people can receive bespoke advice on training and work.
At Prestige Business Management we can help your Business
At Prestige Business Management we can help your business understand the best solutions for the success of your business. Find out what we can do for you. Call us today on 0203 773 292