There are nearly three times the number of unemployed 16- to 24-year-olds claiming Universal Credit (UC) compared to before the pandemic, the National Audit Office’s (NAO) latest report has found.
The report was discussed at a Public Accounts Committee (PAC) hearing on 6 December, which scrutinised the impact of the government’s £1.9bn Kickstart scheme.
Kickstart was launched in September 2020 to get unemployed young people on UC into six-month work placements, with government paying their wages alongside £1,500 for support and training.
The aim was to give young people – many of whom struggled to find work or were furloughed during the pandemic – the chance to build the skills and experience needed to help them find long-term work.
Businesses applied for funding, and the roles created had to be “additional”, meaning they would not exist at the company without Kickstart funding. It is the Department for Work and Pensions’ (DWP) most expensive scheme at £7,000 per participant but the department estimates it will put £1.65 back into the economy for every £1 invested.
Kickstart was one of several schemes created under the government’s Plan for Jobs banner, which includes Restart, a £2.9bn scheme to help people who have been out of work for 12 to 18 months, and the Sector-based Work Academy Programme (SWAP), which offers six-week training programmes to help jobseekers learn skills in a new area.
Despite these programmes and this year’s vacancy boom, young people from low-income households are still finding themselves without a job; the number of unemployed 16- to 24-year-olds claiming UC for over 12 months and searching for work has risen from 48,800 in February 2020 to 144,000 in September 2021.
Nick Smith MP questioned the DWP’s permanent secretary Peter Schofield on the rise in unemployment and asked when the number is likely to return to pre-pandemic levels.
Schofield told the PAC that there were “lots of factors at work”, including the labour market and the pandemic, and could not speculate on when figures would look more promising but added that Kickstart has likely helped to improve outcomes.
“I’m confident [Kickstart] has prevented many young people being out of work for more than 12 months,” he said. “But the reality is there has been an increase in young people out of work and this is where other schemes come in, such as Restart, which [we hope] will make a significant impact.”
The report also found that less than half the number of people that Kickstart initially intended to help have been given a work placement – government planned to place 250,000 individuals by 31 December 2021 but has so far placed just under 100,000. The goal has since been scaled back, and the DWP is aiming for 168,000 starts by the end of March 2022.
Concerns were also raised around employers’ mistreatment of those on the scheme. The DWP has so far terminated its grant agreements with 165 employers, due to issues such as lack of support, unpaid wages or health and safety problems.
Peter Grant MP asked Karen Gosden, director at the DWP and senior responsible owner (SRO) for Kickstart, how the government has protected such employees.
Gosden said that DWP has a complex cases team that deals with issues such as this and finds participants an alternative placement if necessary. “The needs of those young people is absolutely paramount,” she said. “We’ve got all the right people to respond quickly. We then follow up to make sure it doesn’t happen to future young people.”
A source working for the Kickstart scheme tells Spotlight that there have been cases where employers have failed to inform the DWP that their Kickstarter has begun working, resulting in delayed wage payments. “This issue is often resolved easily when the department is notified and intervenes,” they said. Grants have also been withdrawn from employers due to poor behaviour. “There have been incidents where customers have reported that they have been badly treated, spoken down to or discriminated against,” they said.
However, they added that they feel the scheme has been “generally effective”, with a considerable number of Kickstarters remaining in employment after their six-month placements, and those who don’t still being “far better equipped to re-enter the labour market”.
Conversely, employers have complained about the government being slow with paperwork. The Association of Convenience Stores (ACS), which represents more than 33,500 shops and retailers, submitted written evidence to the PAC, stating that administration turnaround times vary from three to ten weeks, “unduly delaying placement start dates”, while there was “a lack of helpful feedback from DWP” when they rejected applications for funding.
The Kickstart scheme closes on 17 December 2021, with the final participants due to be placed by the end of March 2022. The PAC’s report, based on the NAO’s report plus the evidence heard this week, will be published in early 2022.
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