Lockdown measures have slowly been eased, which means that the UK is finally moving into the second phase of recovery from COVID-19. Now, the UK needs to focus on the state of the post-pandemic economy.
While the UK’s job retention scheme (also called furlough) paid 80 per cent of the wages for one in four people in the UK since May, the number of people claiming unemployment benefits has also soared from 22,000 to 2,6 million in June. The new generation, in particular, saw the impact of this new unemployment crisis. 10 per cent of 18 to 24-year olds have reported joblessness, and the number of people under 24 claiming universal credit has almost doubled since lockdown began.
People are worried they won’t find a job even while we move on to the second phase. To try and avoid this looming mass unemployment crisis, UK Chancellor Rishi Sunak announced a £2 billion Kickstart scheme to create more jobs for young people. Here’s everything you should know about the new Kickstart jobs scheme and the new announcement made on 2 September 2020.
The new Kickstart jobs scheme, which Chancellor Rishi Sunak announced at the beginning of August, aims to protect and support young adults in the challenging post-lockdown job market. The scheme will help them get back to work (or start their first job), which will in turn reduce the economical impact of the pandemic on the next generations.
It sounds complicated but it is in fact quite simple. The UK government will reward businesses that employ young adults by paying 100 per cent of their salaries at the national minimum wage for 25 hours of work per week over a six month-long work placement.
Participants will receive £455 per month if they are under 18, £645 per month if they’re 18 to 20 years old, and £820 per month if they’re 21 to 24 years old. In return, employers will have government-paid employees for six months.
The aim of the Kickstarter scheme is that by reducing the costs of employing (as well as training) new gens, businesses will be encouraged to take on more young employees in this fragile economic climate. The scheme will be enforced by Jobcentre Plus, who will allocate successful applicants for appropriate placements. If the jobs scheme works accordingly, an estimated 350,000 job placements will be made.
Furthermore, if everything goes to plan, businesses will then continue to employ participants even after the end of their work placement, if the economy is in a more stable position by then. Even if they do not, new gens who have participated in the scheme will come out with more training and relevant work experience to help them progress in their career. Technically, the more people that are employed, the stronger the economy.
That’s why the Kickstart scheme, although it will cost the government 2 billion pounds, is presented as an important investment in the economy.
Chancellor Sunak first announced that businesses and young people in England, Wales, and Scotland will be able to sign up to be part of the scheme as soon as August 2020. While people were still awaiting the precise dates, it had been announced that placements will start in September 2020. Today, Wednesday 2 September, more information has just been revealed.
Northern Ireland can expect to benefit from a similar scheme but the details of this are yet to be confirmed. The Kickstart scheme is expected to end by December 2021, but this date might be reevaluated and extended depending on the rate of recovery of the UK economy post COVID-19.
The UK government is encouraging all businesses of all scales to participate in the scheme. For applicants, the scheme will prioritise the needs of young jobseekers, more specifically those aged between 16 and 24 years old and receiving universal credit.
If you are an employer looking to create job placements for young people, you can now check if you can apply for funding as part of the Kickstart scheme here. If your organisation is creating more than 30 job placements as part of the jobs scheme, then you can submit your application directly. Start your application here.
If your organisation is creating fewer than 30 job placements, you can’t apply directly and will have to partner with other organisations in order to create a minimum of 30 job placements before applying. Other organisations could include similar employers, local authorities, trade bodies and registered charities. You can find out more about becoming a representative for a group of employers here. You can also contact your local JobCentre Employer Partnership team for help getting a representative.
Your application will be reviewed to check it meets the requirements of the Kickstart scheme. It will then go to a panel for consideration. While the government explained that this is not a competitive process, it also explained that Kickstart will only provide funding when the job placements meet the criteria. After that, you might still be contacted for further information as part of your application. The government is aiming to respond to applications within one month.
If your application meets the requirements of the scheme, you will receive a letter with a grant agreement. This agreement will include what your company has agreed to provide, and how much funding you will receive from the Kickstart scheme. You will then have to sign and return your grant agreement, using the details in the letter, before any job placements can begin. You will need to provide job descriptions for each of the job placements you applied for. This should include what candidates need to do to apply for the job placement. You will then be contacted by the people who have been matched to your job placement.
If your application does not meet the requirements of the scheme, your refusal will explain why and give you feedback. You will then be able to submit a new application with further information. There is no limit to the number of times you can apply for funding, however there is no legal right of appeal.
According to the Jobhelp wesbite, the first jobs should be available from November, so not long to wait! While more information is still awaited, young people who wish to apply for a job through the Kickstart scheme are advised to already speak with a work coach at their local JobCentre Plus.
Candidates will apply for the job placements through and companies will be able to choose who to employ. Employers will only obtain funding if they appoint a young person that has been introduced by the UK government through JobCentre Plus applications.
There has been some confusion among specialist graduate recruitment websites in the last two weeks after the Department for Work and Pensions (DWP) told companies they shouldn’t advertise roles under the Kickstart scheme just yet.
Chancellor Rishi Sunak revealed the scheme nearly two months ago and said more details would be provided in August about how companies could go about hiring unemployed youth claiming universal credit. However, until today when more information was revealed, companies and recruiters were still awaiting more information, with many roles already listed.
Speaking to This is Money, the DWP had said “We will be publishing details about the Kickstart scheme and how employers can get involved shortly. Until then, we urge employers to be patient and to not start advertising roles they want to be covered by the scheme.”
There are also grants available who take on new trainees aged 16 to 24 in England, aiming to triple trainee numbers. Employers would receive a £1,000 grant per trainee plus a £2,000 grant for employers per apprentice under 25 hired, and £1,500 for those over 25, for six months starting 1 August.
In order to facilitate this arrangement, there are plans to double the number of work coaches at Jobcentre Plus across the UK.
Although not all have been revealed in full, there have been several new schemes announced. £101 million will be spent to fund studies for 18 to 19-year-olds in England unable to find work. £95 million to expand the Work and Health Programme to provide additional support for unemployed people on benefits for more than three months. A job-finding support service will be offered to those out of work for less than three months, costing £40 million.
£32 million will be spent over two years for a National Careers Service to provide advice on work and training in England. In addition, the UK government has also announced that it will provide an additional £32 million funding over the next two years for the National Careers Service so that 269,000 more people in England can receive personalised advice on training and work.
While nothing can be said for certain, many have already identified potential flaws in the Kickstart scheme. Some argue that it is easily exploitable, as companies may take advantage of the ‘free’ labour and fail to give participants the high-quality training they need.
Other companies may continuously exchange participants every six months and never offer long-term positions. Others argue that the scheme may encourage companies to replace existing, older workers with new, younger workers.
Recruitment company BrighterBox compared the Kickstart scheme to a similar back-to-work type scheme, called the “Future Jobs Fund (FJF)” which was introduced by former Prime Minister Gordon Brown following the economic collapse of 2008. “The cost of the scheme was roughly 330 million pounds to the Exchequer; in comparison, the Kickstarter scheme has a budget of 2 billion pounds. In 2012, the Department for Work Pensions reported that the net monetary benefit of the FJF initiative was £4,000 per employee and £6,850 per employer. Given that the premise of Sunak’s Kickstart scheme is similar to Brown’s FJF scheme we might expect a similar triumph. If not, we might expect a greater triumph, since the FJF scheme had a budget less than a quarter of the Kickstart scheme.”
Only time will tell. Until then, applicants still await more information on the Kickstart scheme while potential employers start their applications for the grant.