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This briefing was last updated on 22 November 2021. The Library intends to update this briefing but please be aware that information may have changed since the date of publication.

The coronavirus pandemic will continue to have a substantial impact on the UK labour market.

In the three months to September 2021, labour market statistics published by the Office for National Statistics show that there were almost 500,000 fewer people in employment than prior to the pandemic. Almost 40% of these people were aged under 25. Unemployment had increased by over 70,000, while 270,000 more people were economically inactive.

Government employment support

The Government has put in place various initiatives aimed at getting people back into employment:

  • In July 2020, the Government published the Plan for Jobs which contains measures aimed at getting people back into employment, keeping people in their jobs and creating new jobs. This included the introduction of the Kickstart scheme.
  • In September 2020, the lifetime skills guarantee was announced, which will provide a fully-funded college course to any adult without an A-Level or equivalent qualification.
  • As part of the November 2020 Spending Review, the Restart programme was announced. It will support unemployed people to find work.
  • In the Plan for Jobs and the March 2021 Budget, incentive payments were announced that will be paid to employers when they take on new apprentices or trainees. Other measures were announced in the January 2021 Skills for Jobs White Paper.

In the 2020 Spending Review, the Government said it will provide labour market support worth £2.6 billion in 2021/22.

The Library briefing Coronavirus: Support for businesses covers support that is currently available to help businesses keep their employees in work.

The evolving impact of the pandemic on the labour market is tracked in the library paper Coronavirus: Impact on the labour market.

Kickstart Scheme

The Kickstart Scheme provides funding to employers who create new jobs for young people. As of 9 November 2021, over 100,000 young people had started jobs, and 217,000 job placements had been approved and made available.

Employers were able to apply for the scheme from the 2 September. Kickstart jobs originally needed to be started by the end of 2021, but the scheme was extended as part of the Plan for Jobs Expansion. Employers are now able to apply for funding until 17 December 2021, and Kickstart jobs need to be started by 31 March 2022.

The scheme intends to create “hundreds of thousands” of 6-month work placements. The scheme is intended to provide work placements for young people aged 16-24 who are on Universal Credit and who are at risk of long term unemployment.

The scheme will pay employers to create new jobs for these young people, and funding will be conditional on the employer proving that these jobs are new, and are not replacing jobs held by staff who have recently been made redundant. The jobs created must provide a minimum of 25 hours per week, for 6 months.

The Government will provide funding to cover the National Minimum Wage for 25 hours a week for six months if employers meet these conditions. It will also provide £1,500 per job placement to cover setup costs and to support the jobholder to develop their employability skills.

An initial £2 billion has been provided for this scheme, and there will not be a cap on the number of places available. The £2 billion is intended to provide funding for over 250,000 Kickstart jobs.

Restart

As part of the 2020 Spending Review, the Government announced the Restart Scheme across England and Wales. The scheme will provide “intensive and tailored support to over 1 million unemployed people”. Individuals have been referred to the scheme from July 2021.

As of 17 October 2021, 73,665 people had been referred to the programme, and 41,570 have been recorded as having started on the programme.

The scheme will offer “enhanced support” to Universal Credit claimants who have been out of work for at least 12 months.

It will give this support to people who have been claiming Universal Credit in the Intensive Work Search Regime for between 12 and 18 months, with the intention of getting them back into work as “quickly and efficiently as possible”. Work coaches may also give early access to the scheme to some claimants, if this is felt to be the most appropriate route for them.

The Government said that the scheme will provide up to 12 months of tailored support. Participants will receive a personalised offer, which will be tailored to individual and local need, with regular contact.

The three-year programme will provide £2.9 billion of funding, with around £400 million in 2021/22.

Lifetime Skills Guarantee

On the 29 September 2020, the Prime Minister announced the lifetime skills guarantee. Under this guarantee, from April 2021, adults without an A-level or equivalent qualification have been able to access a fully-funded college course.

The courses available to study are only those considered to be “valued by employers”. This initially excluded any courses in the hospitality and catering sector, but courses in this sector were added in July 2021.

The list of qualifications included are published by the Education and Skills Funding Agency, and will be updated as more qualifications are added. As of April 2021, almost 400 courses were available and a list of the subject areas that have been included have been published in the DfE’s National Skills Fund guidance. The table in Annex A also shows which subject areas have been included and excluded as of August 2021.

The guarantee will be paid for through the £2.5 billion National Skills Fund. It was announced at the November 2020 Spending Review that £375 million would be invested from this Fund in 2021-22. This included £95 million for the Lifetime Skills Guarantee.

Apprenticeship incentive payments

In response to the pandemic, two increases to the incentive payments that are paid to employers when they take on new apprentices have been announced.

In the March 2021 Budget, the Government announced that it will pay employers in England £3,000 for every new apprentice they hire between 1 April 2021 and 30 September 2021. In October 2021, it announced that the £3,000 would also be available for every new apprentice that is hired between 1 October 2021 and 31 January 2022.

This was an increase from the incentive that had been announced as part of the Plan for Jobs (July 2020). This paid £2,000 for new apprentices under 25 and £1,500 for those aged 25 and over if they were employed from August 2020 to the end of March 2021.

Prior to the pandemic, the Government was providing £1,000 to employers for every apprentice they took on who was either aged between 16 and 18 or aged between 19 and 24 and had previously been in care or had a Local Authority Education, Health and Care plan. The new payment will be in addition to this.

As of the 29 September 2021, incentive claims had been submitted for 101,460 apprentices.


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