Kickstart: Companies offered £ 1,500 to hire under 24s

The government is urging companies to sign up for a plan to create jobs for young people who are at risk of becoming long-term unemployed, just as many companies are reducing their workforce.

The Kickstart scheme will offer “a future of opportunity and hope,” according to the Treasury, by offering government-subsidized roles to thousands of under-24s.

Businesses can join the scheme starting Wednesday, and the state will pay employers £ 1,500 to help set up support and training.

How does it work?

Selected unemployed youth will be offered six-month jobs, for at least 25 hours a week, to help them gain experience, skills and confidence. The plan is designed to be a stepping stone to more employment.

Chancellor Rishi Sunak said it was an “opportunity to boost the careers of thousands of young people who might otherwise be left behind as a result of the pandemic.”

Who will it help?

Anyone between the ages of 16 and 24 who is unemployed and claims the Universal Credit may be eligible. Government figures suggest that there are already more than half a million people who fall into this category.

Job center staff will identify individuals at risk of long-term unemployment to review the plan, and job center job coaches will support candidates before and after their placement.

The government aims to offer the first placements starting in November.

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Who pays?

The government will fund every Kickstart job, paying 100% of the national minimum wage, national insurance, and age-appropriate pension contributions for 25 hours a week.

Employers can complete the pay out of their own pockets or extend the hours if they wish.

Additionally, the government is offering employers £ 1,500 to set up participant support and training, or other set-up costs, such as purchasing uniforms.

The government has put a price tag of £ 2bn on the scheme, which it says could fund more than 250,000 placements.

What should companies do?

Starting September 2, major employers can visit www.gov.uk/kickstart to register their interest. Employers interested in offering fewer than 30 Kickstart positions must apply through a representative organization, Treasury said.

Tesco and Network Rail are among the companies that have said they will participate, with Tesco offering 1,000 placements.

The plan will run until at least December 2021 and covers the entire UK.

“I think the plan has some merit,” John Nollett, chief executive of Pressmark Pressings, an engineering firm, told the BBC’s Wake Up to Money program.

“We would be eager for people to work who have not worked before.”

He said he liked apprenticeships as a way to give young people an engineering flair, and shorter programs like this mean that younger workers can try a job and see if they enjoy it, without having to sign a longer commitment.

However, he said greater clarity on the plan would have allowed him to plan more.

“Getting information has been really difficult and understanding how we do it.”

Why do we need Kickstart?

A period of unemployment early in a person’s working life can have “multiple healing effects,” according to academic research, with consequences for society over decades.

This year, thousands of young people have already been laid off or lost their jobs as the pandemic wiped out hospitality and retail in particular, sectors that employ many young people. On top of that, more than 700,000 more people are leaving education and entering the job market at an extremely difficult time.

As a result, there are already more than 800,000 children under 24 who receive Universal Credit, many of whom are without work.

“We are really reassured that the government has recognized that young people are particularly affected by this period,” said Michele Farmer, director for central England at the Prince’s Trust, which helps young people to work.

He admitted that the show will have challenges, including ensuring that genuine jobs are offered.

“In an ideal world, I would like to know that anyone who participates in this type of scheme has a real commitment to providing genuine work at the end,” he told the BBC’s Today program. But the plan is “a kickoff for both businesses and young people.”

It will work?

Employers’ organizations have welcomed the Chancellor’s plan. But in the past, from the Youth Opportunities Program in the late 1970s to the Future Jobs Fund after the last recession, schemes to support youth at work have generally been met with some skepticism.

They don’t always offer the level of training or experience that participants expected, and companies are often accused of using them as a pool of cheap labor to replace older and more expensive employees.

It can be difficult to calculate whether the roles created for such schemes are “extra” jobs or just subsidized places that would have been created anyway.

Furthermore, the plan will only kick in if companies are willing to hire new employees at a time when many are laying off workers and downsizing their operations.

Above all, it will only function as a stepping stone to permanent employment if those “right” jobs are available.