In the Budget-that-was-not-a-Budget last week, the third such ‘Budget' of the year, the chancellor Rishi Sunak announced a significant foray into the employment market through the creation of the Kickstart scheme for youth unemployment, on top of the furlough scheme, confirmed at the start of the coronavirus lockdown.
A number of councillors, colleagues across local government and local partner agencies have asked me for views and opinions on this new scheme. What is it really worth to the economy? Will it last? Is it a sustainable national job creation programme? What role will it play in local recovery planning? And how will it help people on furlough?
My first thought is that the scheme is to be welcomed and backed. Alongside the other substantial and expensive economic intervention measures we have seen over the last four to five months, many of them unprecedented in peacetime, a new, funded, £2bn youth jobs guarantee is a substantial offer. The scheme will provide funding to subsidise work placements for 16-24 year old Universal Credit claimants at risk of long-term unemployment, and importantly has a welcome focus on quality – higher wage employment with training and progression routes expected to feature prominently.
My second thought is this is not unprecedented. Yes, this is the first significant job creation (as opposed to job perpetuation) scheme of the crisis, but it has been attempted before in different guises. Its most successful predecessor was the Future Jobs Fund (FJF) under the last government, in response to the financial crisis, which despite its well-known successes did not long outlast the 2010 General Election. Government funded and backed employment supply stimulus plays an important role in combatting recession, whether that government is local or national. The Kickstart scheme in fact now attempts to go further, faster than FJF – aiming to reach 350,000 young people, and being complemented by the new ‘jobs retention bonus' for employers who bring furloughed workers back into employment.
My third thought is Kickstart has to be seen in context. Clearly it will not reach everyone now at risk in the economy; despite the job retention bonus scheme it also is explicitly focused on young people up to the age of 24. Why is this? Much has now been opined on the extent of youth unemployment risk in the crisis – but lots of this is based on generic predictions by commentators assuming that national restaurant chains staffed by undergraduates on summer jobs comprise the entirety of the UK leisure, hospitality and tourism service sector. In fact many of these jobs, and many thousands of those in sectors at equivalent level of risk are occupied by adults. Many of these companies are run and owned by adults whose livelihoods depend on them.
The fact remains that the continuing neglect of programmes to support the 25-65 age group, the backbone of much of the British working economy, is a continuing problem in this debate. Adult funding has shrunk dramatically since the last crisis and it remains under recognised not simply in policy terms but in fiscal interventions in the emergency budgets this year. The need for an inclusive all-ages progression strategy to support both young people and working age adults is part of the recipe for economic success, widely recognised in economies globally that outperform the UK in dynamic labour market success – with Germany frequently quoted as the best example.
My final thought is does Kickstart represent a new fresh focus on employment policy at the heart of government? Alongside Kickstart, it was also welcome news that last week the Government fairly quietly announced its abandonment of the target for 50% of UK young people going into university. That bulwark of UK higher education policy for over 20 years has been dropped because of a new found government regard for further education and vocational routes for young people. Gavin Williamson sought to prove this conversion by announcing a ‘revolution in further education and vocational training in England' and updated Tony Blair's motto, saying: ‘From now on, our mantra must be further education, further education, further education.'
Yet just this weekend, as many as 40 General FE colleges across the UK reported significant financial difficulties, with some warning they will simply not survive the crisis as enrolments on retail, leisure and hospitality courses dry up, adding to the severe strain in the FE sector in recent years. There was no announcement of a review of the 16-17 year old college funding rate, frozen since 2013, to compliment Kickstart. Equally there has been barely a whisper of how far a considerably cheaper FE version of April's £13.4bn NHS debt write off for hospitals could also help this beleaguered sector.
A truly fresh focus on employment policy would take this complex cocktail of risks and shake it up a great deal. As we are discussing in our local economic recovery strategies, an all-ages progression plan for 16-24 years olds, but also for adults, has to form part of this plan. Supporting all our partners and providers, particularly colleges, in funding and delivering this is essential. And ensuring a proper sustainable support package for adults needing to retrain as the furlough tapers to an end this autumn looks more and more essential by the day. So well done to the chancellor on the Kickstart programme. But let's not forget that it is only a partial kickstart, at best.
Tom Stannard is corporate director, regeneration and economic growth at Wakefield Council
