Young people who take part in the government’s £2 billion “kickstart” scheme cannot also be apprentices, the Treasury has confirmed.
Chancellor Rishi Sunak confirmed in his summer statement today that the government will pay the wages of “hundreds of thousands” of people aged 16 to 24 who are claiming universal credit to take six-month work placements with employers.
FE Week asked if a person on the programme could also be an apprentice, and a government spokesperson said that while more details will be outlined on this in due course, the “kickstart eligibility is for a young person who otherwise might not have got into work (and therefore an apprenticeship)”.
The news is likely to concern the sector, including Association of Employment and Learning Providers chief executive Mark Dawe who said without this flexibility, the incentives for kickstart “will wipe out new starts for apprenticeships for the 18 month duration of this very attractive offer of wage support – a very unintended consequence”.
The AELP said they have since spoken with Treasury who explained the scheme is designed for the young person to work with Jobcentre work coaches and providers over the first 13 weeks to make them work ready and then place the person on to a work placement for a further 13 weeks with the aim of the employer offering full-time employment and an apprenticeship at the end.
Therefore, a young person on kickstart “can’t start an apprenticeship while on the scheme”.
Dawe added: “To borrow the prime minister’s words, it appears that the government is using both traineeships and kickstart to principally target young people in the NEET group and make them ‘oven-ready’ for the world of work and a full apprenticeship.
“We welcome the clarification which will help providers plan their provision for September.”
Funding for the kickstart scheme, which will cover 100 per cent of the relevant national minimum wage by age group for a minimum of 25 hours a week, will be conditional on the firm proving these jobs are “new”, Sunak said today.
If employers meet these conditions “we will pay young people’s wages for six months plus an amount to cover overheads”, he added, which means for a 24 year old the grant will be around £6,500.
There will be no cap on the number of placements and the scheme will be open to funding applications from August 2020, with the first jobs are expected to begin in the autumn.
Sunak also today announced a “brand new bonus” for employers to hire apprentices over the next six months.
From August 2020 to January 2021, any firm that hires a new young apprentice aged 16 to 24 will receive £2,000, while those that hire new apprentices aged 25 and over will be paid £1,500.
These payments will be in addition to the existing £1,000 incentive the government already provides for new 16 to 18 year-old apprentices, and those aged under 25 with an education, health and care plan where that applies.
It means that employers could receive up to £3,000 for hiring 16 to 18 year old apprentices during the six month incentive scheme.
The chancellor also confirmed the government will provide an additional £111 million this year for traineeships in England, in a bid to triple participation in the “proven” programme.
The funding boost includes £1,000 being paid to the employer per traineeship learner they take on.