Coronavirus: Getting people back into work

This briefing was last updated on 30 June 2022. 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 a substantial impact on the UK labour market.

The initial impact was a large fall in employment, with a rise in both unemployment and inactivity. Although unemployment has since fallen back below pre-pandemic levels, there remains fewer people in work, and fewer people who are economically active.

In the three months to April 2022, labour market statistics published by the Office for National Statistics show that there were almost 280,000 fewer people in employment than prior to the pandemic. Over 370,000 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.
• 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.
• On the 27 January 2022, the ‘Way to Work’ campaign was announced. This looks to support Universal Credit claimants into work.

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

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 provided funding to employers who created new jobs for young people. The scheme closed to new applications for funding as of 17 December 2021, and Kickstart jobs could be started until the end of March 2022.

The Government has provided funding to cover the National Minimum Wage for 25 hours a week for six months for those who start these jobs. It also provided £1,500 per job placement to cover setup costs and to support the jobholder to develop their employability skills.

As of 24 April 2022, 162,000 young people had been reported as having started a Kickstart job, and a further increase is expected as more employers report the commencement of employment. During the period that the Kickstart scheme was open, 305,000 job placements were approved and 235,000 were advertised.

The Kickstart Scheme was announced as part of the Plan for Jobs, and employers were able to apply from 2 September 2020. 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.

The scheme intended to create “hundreds of thousands” of six-month work placements. It was aimed at 16-to 24-year-olds in Great Britain who were on Universal Credit and deemed at risk of long-term unemployment.

The scheme paid employers to create new jobs for these young people, and funding was 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 six months.

An initial £2 billion was provided for the Kickstart scheme, and there was not a cap on the number of places available. The £2 billion was intended to provide funding for over 250,000 Kickstart jobs. Funding of £1.62 billion was provided in the 2021-22 financial year, although there was an underspend of at least £665 million as the number of job starts was less than the number of jobs that had been funded.

Restart

As part of the 2020 Spending Review, the Government announced the Restart Scheme across England and Wales. The scheme provides up to 12 months of support to participants, and is intended to support over 1 million unemployed people. Individuals have been referred to the scheme since July 2021, and referrals will be made over a 3-year period.

The three-year programme will provide £2.9 billion of funding, with around £400 million in 2021/22. The original estimate of the average cost per participant on the scheme was approximately £2,000.

By the end of April 2022, around 225,000 individuals had started on the scheme, with 16,000 leaving the scheme. Reasons for leaving the scheme include finding a job, or if an individual stops claiming Universal Credit.

The scheme initially offered “enhanced support” to Universal Credit claimants who have been out of work for at least 12 months. Support was provided to people who had been claiming Universal Credit in the Intensive Work Search Regime for between 12 and 18 months. Work coaches were able to give early access to the scheme to some claimants, if this is felt to be the most appropriate route for them.

In January 2022, the eligibility criteria was expanded to include people who have been claiming Universal Credit for longer than nine months, with no upper limit. It was expanded further in April 2022 to include Income Based Jobseekers Allowance claimants.

Participants will receive a personalised offer, which will be tailored to individual and local need, with regular contact.

National Skills Fund

Various initiatives to improve access to training for sector-specific skills were announced in response to the pandemic.

These are mostly funded by the National Skills Fund, and the Government consulted on the offers that will be available through this fund. The Government has committed to investing £1.6 billion through this fund over a three year period.

Apprenticeships

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. 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.

As of the 11 April 2022, incentive claims had been submitted for 186,230 apprentices.

On 3 August 2021, the flexi-job apprenticeship offer was launched. These apprenticeships allow people to move between work placements during their apprenticeship, and support those employers who predominantly offer short-term, project-based employment to be able to offer apprenticeships.