Mayors are rebooting a paid work experience programme trialled by the government during the pandemic in a bid to help more people into jobs.
Kickstart was a £1.1 billion government scheme that offered about 163,000 subsidised work placements for young people on universal credit from 2020 to 2022.
The scheme was initially criticised for being “chaotic” and questionable value for money, but experts agree that such subsidised work experience schemes “add value” to government employment strategies.
West Yorkshire Combined Authority (WYCA) is now planning to launch a local version using “inactivity trailblazer” funding.
The government is releasing this funding to eight areas in England and Wales to stimulate a more joined-up “place-based” approach to employment, health, and skills support.
WYCA estimates that £4 million would fund minimum wages and “wraparound support” for about 400 placements each year.
Its new work, health, and skills plan said other actions to tackle inactivity would include “strengthened health and employment leadership,” addressing “SME barriers to recruiting,” and “continued backing of the voluntary, community, and social enterprise (VCSE) sector.”
Rising NEET problem
The proposals come weeks after the Office for National Statistics released estimates showing 987,000 young people aged 16 to 24 (13.4 per cent of the age group) were classed as NEET (not in education, employment, or training).
WYCA’s plan is funded by £125 million for eight areas in England, announced last year in the government’s Get Britain Working white paper.
This is alongside £45 million in funding for eight “youth guarantee trailblazer” areas.
Experts have welcomed work experience funding, although most are cautious about how much should be invested.
The Institute for Employment Studies (IES), which analysed several past youth employment subsidy schemes in the UK and Europe, said they have a “low positive impact and high cost.”
However, the IES also stated that “the costs were outweighed by the benefits.”
Becci Newton, the director of public policy research at the institute, said: “Subsidies can add value at times when a particular group is at risk, but are generally seen as a short-term solution.”
“We know employers are interested to see a reprise of a Kickstart-type intervention, but we also need to find lower-cost and longer-term solutions to support young people into jobs that are supportive of health and wellbeing.”
West Midlands Combined Authority told FE Week its £5 million share of youth trailblazer funding would fund a new “subsidised work experience programme.”
A spokesperson said: “These programmes have demonstrated success in the past at progressing residents into the labour market.”
“We are building on successful components of these to develop a new model targeted at young people.”
Steve Rotheram, the mayor of Liverpool City Region, appears to be the first to set up a regional subsidised work scheme.
In January last year, he approved a three-year scheme offering up to 240 “wage incentives” of £3,000 for employers who recruited 18-to-24-year-olds.
Kickstart’s impact?
In 2022, MPs on the influential Public Accounts Committee described the Kickstart scheme’s rollout as “chaotic.”
The committee cited its rushed implementation and a failure to collect “basic management information” to track young people’s progress.
However, an internal Department for Work and Pensions evaluation, published last year, suggested that for every 100 people who participated, an additional 11 were in employment after two years compared with a similar group who did not participate.
A cost benefit analysis estimated the scheme made a loss of 73p on every pound spent by the taxpayer after two years, with an average cost of £6,850 per participant.
This improved to a gain of 18p when “wider societal impacts” were considered.
Spend it carefully
Stephen Evans, the chief executive of Learning and Work (L&W), said a Kickstart-style scheme “could” be an effective part of “broad-based” government action to boost employment.
“But it would need to be very carefully targeted on those who need the most help, such as those with no work experience and who’ve been out of work for a longer time, given its higher cost.”
“It also needs to be part of a broader plan for joined-up work, health, and skills services.”
Although the £125 million in inactivity trailblazer funding is available from April, West Yorkshire is the only one of the eight regions to confirm what kind of initiatives it would fund.
The “economic inactivity trailblazer” areas are North East, West Yorkshire, South Yorkshire, Greater Manchester, York and North Yorkshire, two areas under the Greater London Authority, and one in Wales.
The youth trailblazer areas are Liverpool City Region, West Midlands, Tees Valley, East Midlands, West of England, Cambridgeshire & Peterborough, and two under the Greater London Authority.
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