Employers can now apply to offer fully-subsidised work placements to 16- to 24-year olds under the government’s Kickstart scheme – and will receive £1,500 for doing so.
From November, organisations will be able to offer six-month placements to young people who are claiming Universal Credit and are at risk of long term unemployment.
According to the Treasury, a quarter of a million more people under 25 have been claiming unemployment benefits since March, while around 7,000 young people are set to leave education this year.
Employers will receive funding for 100% of the national minimum wage for 25 hours per week, which can be topped up by the organisation, as well as employer National Insurance contributions and employer minimum auto-enrolment pension contributions.
Organisations will also receive £1,500 to help with set up costs, support and training.
Chancellor Rishi Sunak said: “This isn’t just about kickstarting our country’s economy – it is an opportunity to kickstart the careers of thousands of young people who could otherwise be left behind as a result of the pandemic.
“The scheme will open the door to a brighter future for a new generation and ensure the UK bounces back stronger as a country.”
Employers must apply to offer a minimum of 30 placements, but they can partner with another organisation to reach this minimum figure.
Young people will be referred into placements through their Jobcentre Plus work coach. Extra funding will be available for young people to help them gain further work experience and move into sustained employment after they have completed their Kickstart Scheme placement.
Among the firms expecting to use the scheme are Network Rail and Tesco, which said it planned to offer placements to around 1,000 young people.
The scheme is set to run until December 2021, but the government said it would have the option of being extended.
Mike Cherry, national chair of the Federation of Small Businesses, said: “The first experience young people have of work is incredibly important for the future of the economy which is why access to the Kickstart Scheme will be so important.
“Also crucial to the development and upskilling of young people too are apprenticeships and traineeships which is why funding and easy access for employers is so critical if they are to have the positive effect that we need to inject some energy into the economy as well as to help provide high quality education as well as industry placements.”
Dean Sadler, CEO of software company Tribepad, said focusing on young people would be more useful than the £1,000 Job Retention Bonus on offer if employers bring back someone from furlough or extending the furlough scheme.
“As the £2bn Kickstart young adult jobs scheme is set to launch this week, this should be our main focus,” he said. “By extending the furlough scheme, we are only adding more debt to a young person’s long term tax burden, on top of university fees and the effects caused by the recession. Their future now lies in how the government reacts within the next coming weeks. So let’s hope they make the right decision.”
Guidance published by the Department for Work and Pensions today states that the placements must not replace existing or planned vacancies or cause existing employees or contractors to lose their jobs or see their hours reduced.
Young people participating in the scheme must not be required to undertake extensive training before beginning their placement.