politics

Number of unemployed 16-24s trebles raising huge questions over Kickstart scheme


The Kickstart scheme is meant to get people off Universal Credit and into work, but it does not seem to be slowing the huge wave of unemployment among the young since the pandemic started

A young man working at a lathe
The scheme is costly, but it will take years to know if it works or is a white elephant

The number of unemployed young people on Universal Credit has more than trebled since the pandemic started, despite the government’s Kickstart Scheme.

Announced by Chancellor Rishi Sunak last July , Kickstart is meant to help 16-24 year olds on Universal Credit and at risk of long-term unemployment find lasting work.

These people are eligible for six-month placements, with the state covering 100% of the minimum wage for 25 hours a week.

But the scheme has been criticised as the number of unemployed young people on Universal Credit for more than a year has actually risen three-fold.

The National Audit Office (NAO), which monitors government spending, today put out a report into Kickstart.

It found that there has been a 195% rise in the level of unemployed 16- to 24-year-olds on Universal Credit since the pandemic started .

This has risen from 48,800 in February 2020 to 144,000 in September 2021.

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The scheme was unveiled by chancellor Rishi Sunak last July
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Each Kickstart job placement costs £7,000 on average, the NAO found.

The Department for Work and Pensions (DWP) claims that for every £1 invested in Kickstart, the economy could get £1.65.

But that is only if people on Kickstart spend 52 more days in work and 80 fewer days on benefits for five years after their job placement.

It also relies on Kickstart jobs being fit for purpose and proper jobs – i.e. adding value to the economy, which the DWP calls ‘additionality’.

It also relies on these jobs being legitimate, and not just created so employers can access funds through the scheme.

Employers can get up to £1,000 per job hosted through the scheme, to cover their costs.

Currently only around half – 54% – of the money spent on Kickstart has gone into the pockets of young people on benefits.

The scheme has a total budget of £1.9billion.

The DWP had spent £356million by the end of September 2021.

Of that, around £51million has been spent administering the scheme, and £305million has been spent in grants to employers.

But only £166million went to young people trying to find work.

However, the NAO said the DWP got the scheme up and running in just six weeks due to the pressure of the pandemic.

“It did not have time to develop a business case for Kickstart before the government announced its intention to set up the scheme,” the NAO said.

When Kickstart launched, the government hoped it would get 250,000 young people into work by December 2021.

But by November 1 only 96,700 had actually started, with 180,000 jobs advertised.

The government now wants to see 168,000 people start work by March 2022.

The problem is that it will not be possible to work out if Kickstart has provided value for money for years – or if it is a costly white elephant.

The NAO said: “The overall impact of the scheme depends on the additionality of the jobs funded, the quality of the participant experience, and the targeting of the scheme on those people most likely to benefit.

“This will not be fully clear until the Department completes its planned evaluation of participants’ future employment prospects, several years from now. “

A DWP spokesperson said: “We acted quickly and decisively to establish Kickstart at the start of the pandemic when it was feared unemployment levels would more than double – as this report acknowledges.

“The scheme has already delivered over 100,000 new life-changing jobs for young jobseekers on Universal Credit who were at risk of long-term unemployment and will continue to deliver opportunities for young people.”

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