London unemployment: Kickstart scheme can work well but may need to work much harder

London unemployment: Kickstart scheme can work well but may need to work much harder

The scale of the youth unemployment crisis is becoming clear. The number of young people in London on Universal Credit has tripled during the pandemic, with around 67,000 16-24 year-olds unemployed in May compared to 26,600 in the capital in February 2020. That’s an additional 40,000 now without work.

And it could get worse: there are over 550,000 people on furlough in London according to a Greater London authority briefing. Many of those will be under 24 and some of them will be out of work when furlough comes to an end in September. Nationally, 14 percent of those on furlough are under 24. If the proportion in London is the same, there are 77,000 people at risk of boosting the number of young unemployed in the capital.  

What is being done to address this? A year ago, the government launched its Kickstart programme, an employment support measure specifically targeted at out-of-work young people. They are offered six-month paid work placements to help them gain experience and skills. The aim is to generate some 250,000 placements nationally by the end of December 2021. The government funds each Kickstart job by paying the full age-related National Minimum Wage along with National Insurance and pension contributions for a 25-hour week. This will be the most expensive of the government “back-to-work” schemes costing, the National Audit Office estimates, around £6,700 per person.

Anyone between the ages of 16 and 24 who is out of work and claiming Universal Credit may be eligible. Jobcentre “work coaches” identify people at risk of long-term unemployment and refer them to potential employers. However, it is then up to the young person to put together an application for the placement. As one borough has noted, referrals don’t necessarily translate into quality applications and applications don’t necessarily result in a placement. Indeed, some employers have too high expectations of the applicants and need reminding that they are supposed to be offering entry level jobs. 

previous On London article noted business reticence towards the scheme, with only 16 per cent of those surveyed by the London Chamber of Commerce & Industry in October indicating that they would be looking to take part. Concerns around the levels of bureaucracy involved have led the government to tweak the scheme. For example, it has scrapped the requirement for firms wanting to offer small numbers of placements to go  through a nominated “gateway” partner intermediary

Even so, the latest published data indicate that although there are some 28,000 Kickstart placements advertised across London, only 8,880 young people have started work through the scheme so far. Nationally the picture is the same and the numbers in placements are some way behind earlier government projections of where we should be if the overall target is going to be met by the end of this year.

Some big firms, such as Domino’s Pizza and Green King, are offering large numbers of Kickstart placements and London’s councils are working hard to promote the scheme to the local businesses they know. For them, the  financial incentive is strong, particularly for micro-businesses or even sole traders who might not have the resources to take on staff. Placements are being offered across a wide range of sectors including business administration, financial services, retail and hospitality.

There are lingering concerns over the administration and delays at Department for Work and Pensions (DWP) level. It has taken a while for it to get the right level of resources in place and there is a long lead-in time for employers to apply, get approval and for the department to upload the vacancy – approximately two months.

The DWP has been on a crash course to get more work coaches embedded in the organisation – some 13,500 new ones have been recruited over the past few months – but they have to be trained and their caseloads expand as they become more experienced.

The NAO estimates that each work coach will, as a rule of thumb, have a caseload of 125 claimants, which sounds a lot given that personal relationships with claimants are vital for directing them to appropriate opportunities. This initial stage can take time, particularly if people have more complex needs or are further from the labour market and time is pressing to take advantage of the scheme. 

However, Camden’s economic development lead, Councillor Danny Beales is upbeat: “Overall we have seen a really positive mix of job offers, from Camden Council placements across a variety of teams, a number of community organisations and knowledge quarter employers too – a real range of exciting Kickstarter roles.” The council has a target of supporting 200 young people on Universal Credit into new Kickstarter places and has 76 in a job already.  

Where it is working well, Kickstart is giving young Londoners the chance to gain work experience, get paid and perhaps to try something they wouldn’t have otherwise thought about. As London business confidence continues to improve, the hope is that more placements will be made available. The talent is out there waiting for an opportunity to shine.

Richard Derecki is an economist and governance expert who has worked for the 10 Downing Street strategy unit and the Greater London Authority. Follow Richard on Twitter. Aisling Taylor is a freelance multimedia journalist. You can follow her on Twitter too. Image from Tower Hamlets Kickstart scheme.

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Categories: Analysis

1 Comment

  1. Andrew Dobbie says:

    Kickstarter clearly is capable of supporting high quality placements. My nephew in Camden borough left university last year and was unemployed thereafter; about 4 weeks ago got placed into a job connected to his skill set and interests (videoing sports and then editing down for clients), only speaks highly of the help he got from the job coaches. Anecdotal obviously but his experience has been really positive when he needed the support.

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