08 July 2020
Today’s statement by the Chancellor, Rishi Sunak, reinforced the Government’s commitment to ‘protect, support and create jobs’ through the uncertain recovery period ahead. Their specific solutions to rapidly rising youth unemployment have been encouraging to see given the pandemic has hit young workers hard and fast:
- Young people are more likely to be furloughed (with high numbers working in travel/tourism and hospitality), with a quarter of a million more under 25s claiming unemployment benefits since March.
- Around 700,000 young people are leaving education this year, and will be entering the labour market at an extremely difficult time.
- As of May there were almost 500,000 young people aged 24 and under on UC. That figure increased by a quarter of a million in just two months.
Under the new £2 billion 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 (UC) 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.
- They must be newly created jobs and there is no cap on the number of jobs which can be created under this scheme.
The national Kickstart Scheme will be open to funding applications from August 2020, and the first jobs will begin in the autumn.
The Chancellor also announced:
- £111 million investment to triple the scale of traineeships in 2020-21,
- A new £2,000 bonus for employers who hire apprentices under 25,
- An extra £32m for the National Careers Service to provide tailored jobs advice to a quarter of a million more young people, and
- £17 million of funding to almost triple the number of sector-based work academy placements in 2020-21,
- A doubling of staff at job centres to better support those who are unemployed.
The Government’s Three Point Plan for Jobs
- Job Retention Scheme – The first phase of the scheme, which began in March, focused on protection, with one of the largest and most comprehensive economic responses in the world. This will financially incentivise employers with a £1,000 bonus to continue to employ their furloughed staff once the furlough scheme ends in October until January 2021. Employees must be guaranteed a monthly income of £520 each month during this period.
- New Deal Plan for Jobs – The Chancellor’s plan for jobs and the PM’s ‘New Deal’ speech last week will form the second phase of a three-phase strategy to secure the UK’s economic recovery from coronavirus.
- Spending Review – The third phase will follow in the autumn with a Budget and Spending Review.
Is this good news for young people?
Yes, there is clear commitment to support young workers hit by unemployment and to create new jobs and apprenticeship training opportunities for young people who are just entering the job market. In the last recession, young people were hit hardest with the unemployment rate amongst 16-24 year olds four times higher than for the 25+ age group.
However, the scale and nature of this pandemic crisis are unprecedented, with much uncertainty ahead in terms of potential national or local lockdowns.
Support for those young people who were outside the labour market, education and training before the pandemic hit is of key concern to London Youth.
- Our youth organisations play a critical role in building confidence, skills base and ambitions of these young people, both through our specific employment problems and a range of other community based activities our members offer.
- These perceived softer, less vocational skills will be critically important to help counter act the impact of social isolation, poverty and poor mental health as a result of the experiences of lost education and unemployment caused by lock down.
The skills that young people gain in the workplace are absolutely essential to developing the confidence and resilience to get into and stay in good work. Unfortunately, the practical experience of a paid work placement is just out of reach for many young people. The Kickstart Scheme will be a welcome first step on this journey for many young people, at a time when their employment future is looking more uncertain than ever.”
Kelly Drummer, Head of Sport and Employability
For more detailed information about the announcement, click here to read about the Government’s Plan for Jobs 2020.
London Youth has been part of the Youth Employment Group, representing employers, charities and youth practitioners, who’ve been actively canvassing Government to ensure young people were placed centre stage in national economic recovery planning.