Will the plan for jobs work for you?
Amid the frenzy of government announcements since the beginning of the coronavirus pandemic, some of the more interesting elements may have gone unnoticed. So you might be forgiven for having missed Chancellor Rishi Sunak’s Plan for Jobs, announced in early July. Christian Doherty reports.
The plan’s centrepiece is Kickstart: a £2bn fund to create hundreds of thousands of high-quality six-month work placements aimed at those aged between 16-24 years old, who are on Universal Credit and are deemed to be at risk of long-term unemployment.
Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.
Beyond that, the government has pledged to support the creation of more traineeships, with a further £111m made available in England; enough, the government says, to triple participation in traineeships. For the first time, employers who provide trainees with work experience will receive government funding at a rate of £1,000 per trainee.
The third major announcement was a boost for new incentives for apprentices. Under the plan, the government has promised a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 January 2021.
These payments will be in addition to the existing £1,000 payment the government already provides for new 16-18 year-old apprentices, and those aged under-25 with an Education, Health and Care Plan – where that applies.
In addition to these, an extra £17m of funding will triple the number of sector-based work academy placements in England, while the Expanded Youth Offer will see an expansion of the “intensive support offered by DWP in Great Britain to young jobseekers, to include all those aged 18-24 in the Intensive Work Search group in Universal Credit”.
Sunak said the measures combined to soften the worst of the economic impact of the pandemic, with thousands of businesses facing the prospect of freezing any recruitment at best, versus laying off staff at worst.
And the chancellor clearly believes the schemes will form a central part of the UK’s economic recovery, says Simon Ashworth, director of policy at the Association of Employment and Learning Providers (AELP).
“The government are clearly hoping for a quick, V-shaped recovery and that training-led work opportunities will lead the way,” he says.
“It’s a good basket of measures, although I think the incentives for apprenticeships probably didn’t go far enough. We felt it should have been more like 50% of someone’s salary to make a significant difference. It looks like they’ve budgeted for 100,000 incentives and we were quite surprised that the new incentives for 25+ plus apprentices that was so generous; we’ve never had an incentives scheme for older apprentices. That means we may see more businesses continuing the trend of upskilling their existing workforce rather than take on new hires.”
However, Ashworth suspects most of the jobs on Kickstart will be entry level in areas like hospitality.
“The key test of it will be how many of them progress into real jobs with that employer, or will employers just use it for free labour,” he explains.
“Like the traineeship it’s kind of ‘try before you buy’, whereas the apprenticeships do represent a clear line where you’re investing in the individual, and you want them for the longer term. So we’ll have to see how employers behave.”
To help employers make the most of the schemes - and to improve the chances of a smooth rollout - Ashworth says there are suggestions that the DWP may bring in large recruitment firms to help facilitate the programme. “We’re not sure if it’s confirmed but that might help manage the big increase in volume of work placements,” he says.
Ashworth’s cautious optimism is echoed by Lizzie Crowley, skills policy adviser at the CIPD. “There were certainly a lot things we were calling on the government to do, and we welcomed the plan, but the risk is that the balance of incentives isn’t sufficient to encourage firms that weren’t going to provide apprenticeships and other types of employment, and that they’re not targeting the right companies, particularly SMEs,” she says.
Given that, Crowley’s advice to employers unsure of how to take advantage of any of these new measures was to avoid being distracted by the headlines and take a long-term view. “Stick to your plan and make sure you understand your business’s needs: that has to be the fundamental basis for engaging in these schemes.
“So think about the skills gaps you currently have; what are the ones that are likely to develop in the future; and how can these schemes and incentives fi t within those plans. Then it can become a benefit to get the extra money. Could you employ a key mentor, for instance, to strengthen your existing team? So approach it from the standpoint of what the business needs, and how can these schemes help me address that to help the business succeed and grow.”
Christian Doherty is a freelance journalist