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This briefing was last updated on 9 February 2020. The Library intends to update this briefing but please be aware that information may have changed since the date of publication.

The coronavirus pandemic has had, and will continue to have, a substantial impact on the UK labour market. The evolving impact is tracked in the library paper Coronavirus: Impact on the labour market.

By November 2020, employment levels had fallen by around half a million people from levels prior to the pandemic, while unemployment levels had risen by around 350,000. The OBR has projected a rise in unemployment of 800,000 in the second quarter of 2020, following the end of the Coronavirus Job Retention scheme, peaking at a total of 2.6 million.

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

  • In July 2020, the Government published the Plan for Jobs document which highlights measures that will be put in place with the aim of 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 launched. The programme will provide support to unemployed people to help them find work.

The Government has reported that it will provide labour market support worth £2.6 billion in 2021-22.

The library paper Coronavirus: Support for businesses provides information on the support that is currently available to businesses to support them to keep their employees in work.

Kickstart Scheme

The Kickstart scheme provides funding to employers who create new jobs for young people. As of 4 February 2021, over 100,000 job placements had been approved and over 2,000 young people had started jobs.

Employers were able to apply for the scheme from the 2 September. Employers will be able to take on individuals until the end of December 2021.

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.

When the scheme was first announced, applications for Kickstart grants had to be for a minimum of 30 job placements. This was amended in February 2021, with the removal of the minimum number of placements. All employers are now able to apply directly for a grant.

Kickstart gateways can help employers with the process of getting a kickstart grant, and also offer employability support to the young person on the scheme. Gateways are paid £300 for the admin costs of each placement. They may also receive a share of the £1,500 paid to employers if they agree to provide employability support.

Over 700 organisations were approved as Gateways, and a list of these is available on Gov.uk.

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 programme. The programme will provide “intensive and tailored support to over 1 million unemployed people”.

The programme will provide “enhanced support” to Universal Credit claimants who have been out of work for at least 12 months. The scheme will provide up to 12 months of tailored support. Work coaches may give early access to the scheme to some claimants if this is felt to be the most appropriate route for the individual.

The 3-year programme will provide £2.9 billion of funding, with around £400 million of funding in 2021-22.

The programme will go live in Summer 2021, and the commercial process began in December with contracts expected to be awarded to providers in Spring 2021.

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 will be offered a fully-funded college course. The courses that someone will be able to study will be limited to those that are “valued by employers”.

The list of qualifications included were published by the Education and Skills Funding Agency in December 2020. Almost 400 courses are available and a list of the subject areas that have been included have been published in the DfE’s National Skills Fund guidance.

The guarantee will be available from April in England, and 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, which included £95 million in funding for the Lifetime Skills Guarantee.


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