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This briefing was last updated on 8 September 2020. The Library intends to update this briefing but please be aware that information may have changed since the date of publication.

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

In the July Fiscal sustainability report, the OBR forecast that the unemployment rate would peak at a level between 9.7% and 13.2%, compared to a rate of 3.9% in the first quarter of 2020.

In response the Government has published a Plan for Jobs document which highlights the measures that will be put in place to help get people back into employment, keep people in their jobs and to create new jobs.

This includes the following employment support measures:

  • A Job Retention Bonus that will pay employers £1,000 if they re-employ furloughed workers.
  • The Kickstart scheme that will provide funding towards the wages of 16-24 year olds on Universal Credit.
  • Incentives for employers to take on apprentices and trainees.
  • Various other measures to support young people to find work, such as extra funding for the National Careers Service and for Jobcentre employment support programmes.

Kickstart Scheme

The Kickstart scheme was initially announced as part of the Plan for Jobs, and further information on the scheme was published on the 2 September. Employers have been able to apply for the scheme from this date.

The scheme intends to create “hundreds of thousands” of 6-month work placements. It is aimed at 16-24 year olds in Great Britain who are on Universal Credit and are deemed 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 employers will also be expected to provide training and support to the Kickstarter to find a permanent job, although they should not need to undertake extensive training before they can begin the work placement.

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 up to £1,500 per job placement to cover setup costs, support and training.

Jobcentre Plus work coaches will support Universal Credit claimants “who are ready for an opportunity” to enrol in the scheme. Employers will then interview applicants and select the best candidate for their role.

Applications for Kickstart grants must be for a minimum of 30 job placements. If an organisation is not able to offer this many placements, then they would need to partner with another organisation to reach this number. Where this is the case, a representative needs to be put in place to submit the application.

Once a job placement is created, a different person can take over the role at the end of the six month period.

An initial £2 billion has been provided for this scheme, and there will not be a cap on the number of places available. The Government has reported that, for a 24 year old, the grant will be worth around £6,500. This is based on the National Minimum Wage for those aged 21 to 24. The grant would be worth less for those aged below 21 as the minimum wage is less for these workers.

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