Richard Derecki & Aisling Taylor: Government’s Kickstart programme for young unemployed needs bold backing from the Chancellor

Richard Derecki & Aisling Taylor: Government’s Kickstart programme for young unemployed needs bold backing from the Chancellor

It was introduced to such fanfare by the Prime Minister back in June – an “opportunity guarantee” that every young person has the chance of an apprenticeship or an in-work placement. Nine months and two further lockdowns on, progress has been much slower than anticipated, but there are small signs of success that must be built on as the country eases out of its restrictions.

A central part of the guarantee is the Kickstart programme, which is specifically targeted at out-of-work young people who will be offered six-month placements to help them gain experience and skills. Anyone between the ages of 16 and 24 who is out-of-work and claiming Universal Credit may be eligible, with Jobcentre staff tasked with identifying people at risk of long-term unemployment to refer to the scheme.

The government will fund each Kickstart job – paying 100% of the age-relevant National Minimum Wage, National Insurance and pension contributions for a 25-hour week. A hefty £2 billion price tag has been attached to the programme, which it is claimed could fund up to 350,000 placements.

A previous On London article noted business reticence towards the scheme, with only 16% of those surveyed by the London Chamber of Commerce & Industry in October indicating that they would be looking to take part. Information on whether the scheme is gaining any traction with employers is still hard to come by.

The most recent announcement by the Department for Work and Pensions (DWP) is that more than 120,000 jobs placements have been approved nationally, albeit with just 2,000 young people having actually started in Kickstart placements. Given that there are 620,000 16-24 year olds out of work and claiming Universal Credit with nearly 200,000 having been unemployed for six months or more, the scale of the task ahead is clear.

At the end of January, following criticism that the way the programme had been set up was too bureaucratic, Rishi Sunak announced that small businesses would be able to offer placements direct to job centres rather than having to group together or use a “Gateway” provider as intermediary. While the idea is to speed up the process, any increase in numbers of individual applications will have implications for the DWP in terms of administration and management.

Already, some businesses have had applications rejected without any feedback as to why. They want to help and offer a placement, but aren’t sure where they’ve gone wrong. There are also fears that while quantity could increase quality might be sacrificed as the scheme becomes little more than a hiring subsidy.

Despite the efforts of Labour MPs to obtain regional and industry breakdowns, we remain in the dark as to where placements are being created and in what sectors. We do know that London has created 143 Gateway organisations, far more than any other region, with London Councils data indicating the leading role London’s boroughs are playing in getting Kickstart up and running.

Twenty boroughs have had their bids to DWP approved, with 14 of those being for a Gateway organisation and six being for both a Gateway organisation and a direct employer. Four more boroughs have submitted bids or are expected to do so by DWP, while three others are participating in the Kickstart scheme locally but not leading them.

A recent report from Kensington & Chelsea Council (RBKC) illustrates how the local authority and the local business community are coming together to generate some varied and interesting opportunities for young people. RBKC’s bid offers 64 vacancies through 21 employers with placements in tech, on-line retail and community centres amongst others.

This is great news, but with 885 young people in receipt of Universal Credit across the borough and actively seeking work, there is still so much to do to support businesses to come forward with placements. None of these Kickstart vacancies have yet been filled and it is now over to the job coaches to match candidates to the posts and to support their applications. As it is still early days for many of the placements and with the young people still in the application stages, it will take some months before we can hear from them about their experiences and future career aspirations.

Helen McIntosh, president of the South East London Chamber of Commerce, thought the initial idea was “brilliant” but that the practical implications of the scheme had not be thought through properly, which partly explains why it has taken so long to get placements up and running. She believes the scheme will have to be extended beyond its original December 2021 end date if the Chancellor is going to come anywhere near hitting his targets.

Along with a number of other local chambers of commerce, the South East LCC moved quickly to become a Gateway to support businesses wanting to offer a small number of placements and to ensure they were of a high quality. Helen is disappointed that the Gateways are being abandoned by the government – they can still operate but employers have little incentive to use them now. One of the very positive outcomes from setting them up has been the close working relationships developed between the business chambers and local colleges. This has created potential opportunities for the work placements to eventually transition into apprenticeships, something the recent White Paper on Lifelong Learning is keen to promote.

Assessments of previous into-work support schemes have shown that crucial to their long-term success is ensuring that the experience for the young people on the placements is an enriching one, that they have the support to look for a follow-on job if necessary, and that some additional support for employers is available to recruit participants into regular employment – which, at the end of the day, is the desired outcome. Helen McIntosh agrees and would like to see support for employers to turn the placements into more permanent jobs with a cut in PAYE or a reduction in National Insurance. Even a small saving could help at a time when so many employers are frightened about how the economy will recover.

Tomorrow’s Budget presents an important moment for the Chancellor to take stock of Kickstart and other elements of the Opportunity Guarantee. With evidence mounting in the latest labour market statistics of the damage being done to the prospects of so many young people and the cautious timetable for the easing of social distancing restrictions, it is time for Sunak to be bold in his response.

Richard Derecki is an economist and governance expert who has worked for the 10 Downing Street strategy unit and the Greater London Authority. Aisling Taylor is a journalism masters student at City, University of London. Follow Richard on Twitter.

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