Kickstart Scheme

To ask the Secretary of State for Work and Pensions if she will make a statement on the implementation of the kickstart scheme.

Yesterday, the Government launched our new kickstart scheme, as set out in the written ministerial statement and the letter sent to all Members of both Houses. This £2 billion programme will fund the direct creation of thousands of additional jobs for young people at risk of long-term unemployment, to improve their chances of progressing to find long-term, rewarding and sustainable work.

As we build back our economy and return fully to work, a lack of work experience can be a barrier to stepping on to the jobs ladder, which is why, through kickstart, employers will be supported to access a massive recruitment pool of young people who want to work and are bursting with potential. Employers from all industries and across the private, public and voluntary sectors are eligible if they can meet our simple criteria on the provision of roles. Employers will need to show that these are additional jobs which provide the experience and support a young person needs to improve their chances of permanent employment. These need to be new roles that do not simply replace staff recently made redundant.

Funding available for each job covers the relevant national minimum wage rate for 25 hours a week, the associated employer national insurance contributions, and employer minimum automatic enrolment contributions, as well as £1,500 for wraparound support. There is no limit to the number of jobs that can be created, and organisations of all sizes are encouraged to participate.

If a business wants to offer only one or two kickstart jobs, as set out in the online guidance, employers can contact their local employer support managers with an expression of interest, and we will work to link them to an appropriate intermediary. These intermediaries could include local enterprise partnerships, local authorities or business groups, ensuring the necessary support is in place to deliver placements effectively. We will continue to be proactive in involving employers and intermediaries following the scheme’s launch yesterday.

We have already undertaken substantial engagement on our labour market strategy. I want to pay tribute to our civil servants in the DWP and the Treasury who have brought this scheme to fruition, and I particularly want to thank and recognise my hon. Friend the Member for Mid Sussex (Mims Davies), the Minister for employment, who has worked tirelessly with her usual passion for helping young people get on in life and who I know will continue to do so.

Kickstart is a key strand of our plan for jobs focused on young people and will be a boost for the British economy. I want to encourage businesses and organisations all to take advantage of the most ambitious youth employment programme in our history and help kickstart to become a flying start for our young people.

Since the crisis began, we have been urging the Government to introduce a scheme based on the last Labour Government’s hugely successful future jobs fund to get as many young people into work as possible. We therefore welcome the kickstart scheme in principle, but we want assurances that it will be delivered in a way that maximises its impact. On that note, it is disappointing that it has taken until September for the scheme to be launched, and it is disappointing to have to summon Ministers via an urgent question just to ask basic questions on how the scheme will work.

In July of this year, there were already over 1 million young people not in full-time education or full-time employment. This is an urgent problem and we believe that the three key tests of this scheme are: whether the jobs it provides are real, quality jobs; whether it is available to support smaller businesses as well as larger ones; and whether it provides opportunities for long-term employment beyond the initial subsidised placement.

I ask the Secretary of State, first, how the Government will ensure that the jobs provided under this scheme are genuinely new, additional jobs. That is essential for the scheme to be a success, but how will it be evidenced? Secondly, given the existing scale of need, how will the Government ensure that the jobs that are created go to those who need them most? Even if, say, 200,000 new jobs were created, we could reasonably expect over 1 million young people to be eligible for those jobs. We need those jobs to go where they will have the biggest impact.

Thirdly, what feedback have the Government already received on the arrangements the Secretary of State has outlined for small businesses to participate in the scheme, given that the minimum number of jobs that can be created from a bid is 30? I hope she understands the considerable strength of feeling that already exists from small businesses in relation to that point. Fourthly, the jobs will be for a minimum of only 25 hours a week, but the Secretary of State has already brought back conditionality and sanctions, expecting people to look for work for 35 hours a week. If the Government’s expectation is that everyone should be working 35 hours a week, why are the jobs that the Government themselves are creating not for 35 hours a week?

I thank the hon. Gentleman for his sort of support for the kickstart scheme. I really think that across the House we should see this as an opportunity for us all to help young people in our constituencies. On the principles of the future jobs fund, we have actually taken some learnings from that, on where it worked and where it did not. He referred to the fact that it had taken so long to get here, but we had the pandemic in March and this approach was announced in July. We have worked tirelessly on it and, as I say, I pay tribute to my civil servants in that regard. This is actually quite a contrast to the financial crisis of the late noughties, because I think I am right in saying that that placement scheme did not get going until October 2009. It was a long time before that happened, so we have worked at pace.

There are other elements from last time that we have learned from. Hardly any private sector businesses were involved, and the criteria were so stringent in different ways that, frankly, that scheme was very limited. I know that it is not about setting targets for these things, but the consequence of that was that the future jobs fund achieved just over 100,000 placements, although the ambition had been higher. So we have simplified the criteria.

The hon. Gentleman points to the threshold for small employers to get involved, but it is exactly the same threshold that applied to the future jobs fund, where businesses could only get involved by going through their local councils. We are opening this up in a different way, and I think we will start to see local enterprise partnerships and chambers of commerce getting involved as intermediary bodies, as well as councils. There is also a lot of support for this from many of the mayoral combined authorities.

The hon. Gentleman mentioned the number of hours per week. The reason for this is that this is not just about rebates like the coronavirus furlough scheme. Young people will be expected, with their employers, to do more to prepare themselves for the world of work, and that may include work search in additional time. So that is another reason why intermediaries are going to be a key element in helping some of our small businesses to provide these placements, as well as the wraparound support that will be required. On the other elements to which he referred, I know that he has tabled several written questions and he will be answered.

I thank the Secretary of State for a very helpful update. By way of some instant feedback, I found in my inbox this morning many questions from employers in Warrington South who are already keen to be part of the kickstart scheme. Can my right hon. Friend confirm that the Government will pay 100% of the cost of wages, national insurance and pension schemes, so there is no reason why businesses in Warrington South cannot sign up and create new jobs for young people?

My hon. Friend is right: we are paying 100% for 25 hours a week, which is the minimum hours that we would expect people to be working. Of course, if employers want to pay more and do more, they can. This is not a limitation on the ambitions of organisations or the relevant contributions. I am pleased to say that people can go on gov.uk/kickstart today and see the online guidance. If they are a small business and cannot offer 30 jobs over the next 18 months, they can go straight to a contact in the DWP, and we will do that linking for them. More than 6,000 people had already started an application yesterday. That is very encouraging, and I am excited about it.

We welcome any intervention that can protect jobs and secure the future of young people across these isles. The most effective intervention would, of course, be to extend the furlough scheme. I have three clear questions to ask in the time I have. First, why have the UK Government failed to respond to Scottish Government correspondence asking to work together on the implementation of the kickstart scheme, which is for Scotland, England and Wales? The Scottish Government have introduced a £60 million youth guarantee, which will guarantee every young person an opportunity for education, a job or training, backed by additional funding for apprenticeships and the new job start payment.

Secondly, why have the UK Government set as a minimum to qualify for the kickstart scheme that employers need to take on 30 new employees? Adding the bureaucracy set out yesterday will not help small businesses or young people in Airdrie and Shotts, and there is deep concern from the Federation of Small Businesses about this being a barrier, so why is there a 30-job minimum? Finally, will kickstart participants be paid the real living wage? I understand that they will not —why not?

The hon. Member may not be clear on the elements of the scheme, so I encourage him to read the written ministerial statement, the “Dear colleague” letter and what is on gov.uk. It is not a case that an employer has to come forward with a minimum of 30 placements over the lifetime of the scheme. That is if they want direct access to the DWP and a direct relationship, which is completely different from what happened under the future jobs fund. Small businesses can go through intermediaries, and that is why we have those links.

In terms of working with the Scottish Government, I am very conscious, and it is right, that the Scottish Government should be doing elements of this. Scotland has the highest unemployment rate in the UK, so it is no surprise that they are trying to fix that. It is important that we have the scheme consistently across Great Britain. In Northern Ireland, this is entirely devolved, but we will be working closely with it. It is important that we have a national framework and local delivery, and I am pleased that our jobcentres in Scotland are already on the case.

The kickstart scheme is a brilliant example of the lengths that this Government are going to in order to support employment across the whole country. Will my right hon. Friend join me in urging businesses in Blackpool South to sign up and take part in the scheme, so that we can make a real difference to the lives of young people in my constituency?

My hon. Friend is so right. He is a great champion for the young people of Blackpool, as well as people of all ages. This scheme is really important to help communities such as Blackpool, and I am pleased that he is taking a lead in promoting it. It is key that we have a wide range of placements available. Of course, all referrals will be through the Jobcentre Plus network. It is that local partnership between our jobcentres and local employers, as well as the national approach that can be taken by larger organisations, that will mean that this reaches every part of the country, from coast to coast.

I opposed the closure of the future jobs fund in 2011. The Work and Pensions Committee, in its report in June, highlighted what a great job that scheme did 10 years ago, and I warmly welcome and applaud its return. Will the Secretary of State encourage charities, as happened last time, to take full advantage of the scheme, because they can create jobs that will give many young people a great start to their working lives? What will she do to ensure that disabled young people can take full advantage of it? Will she ensure the collection of sufficient data to allow a thorough evaluation subsequently, like the one published by her Department in November 2012?

I welcome the endorsement of the Select Committee Chairman. He will recognise some similarities to the future jobs fund, but ours is a much more ambitious programme and we are opening up more gateways into making sure that young people can access work and support. Of course the scheme is open to charitable organisations, which have been part of aspects of our engagement in considering the design of the programme and can be a very useful source here. My ministerial colleague in the Lords, Baroness Stedman-Scott, has great experience from her previous organisation and is already being an active ambassador with not only a variety of companies but other institutions, as is the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Mid Sussex (Mims Davies).

Does my right hon. Friend agree that the young people of this country are our future and that the kickstart scheme is both a huge help to them in securing work and gaining valuable experience and immensely helpful to businesses that are coming out of lockdown and getting back to business, as it helps them to add to their workforce?

I agree with my hon. Friend that this is a mutually beneficial arrangement for young people and employers. The amount of money that has already been set aside is £2 billion of investment over, in effect, the next two years. We know that unlimited placements can be generated, and I am conscious that we need to try to get those partnerships going quickly, so that we can help young people to get on that first rung of the ladder.

What safeguards has the Secretary of State put in place to ensure that disabled young people are fully able to benefit from the kickstart programme? The employment rate for them stands at 37%, which compares with a figure of 57% for non-disabled people, so will she ensure that this new programme supports disabled young people?