Chancellor Rishi Sunak presented a Summer Economic Update on Wednesday 8 July 2020. In his speech he stated that the government has taken decisive action to protect the UK economy but people are anxious about losing their job and the rise in unemployment.
This will be a £2 billion fund to create hundreds of thousands of high quality six-month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment. Funding available for each job will cover 100% of the relevant National MinimumWage for 25 hours a week plus the associated employer National Insurance Contributions and employer minimum automatic enrolment contributions. Comment The aimof the scheme is to give young people the chance to build their confidence and skills in the workplace and then to gain experience that will improve their chances of going on to find long-term, sustainable work. The Chancellor stated in his speech that the funding will be conditional on the business proving these are additional jobs. More changes to support jobs To address the ongoing challenges that the economy faces, the government has a large-scale plan to support people in finding jobs, enable them to gain the skills they need to get jobs and provide targeted help for young people to get into work. In addition, the government intends to support those who are out of work for a longer period with a new large-scale employment support offer. Further details will be announced shortly.
The Chancellor’s statement was therefore setting out the government’s Plan for Jobs. The policy measures set out a three-point plan. The Chancellor stated the aims of the government are to:
• first - support people to find jobs • second - create jobs • third - to protect jobs.
Our summary of the measures follow the three-point plan. In addition we explain some of the other measures that are still operating to support businesses and their employees - in particular the second phases of the Coronavirus Job Retention Scheme and the Self-employment Income Support Scheme. Both of these measures will continue to provide support to businesses and employees. Please do not hesitate to contact us if you would like assistance with either of these measures. Supporting jobs Job Retention Bonus The Job Retention Scheme has supported over one million employers to protect over nine million jobs. The government has confirmed that this scheme will finish at the end of October and further details of the scheme are provided later in this summary. The Chancellor has announced that a new Job Retention Bonus will be available to reward and incentivise employers who retain their previously furloughed employees. The government will introduce a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed through to the end of January 2021. However, employees must earn above the Lower Earnings Limit (£520 per month) on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Payments will be made from February 2021. Further details about this scheme will be announced by the end of July.
The announcements include:
New funding for National Careers Service - an additional £32 million funding over the next two years for the National Careers Service for personalised advice on training and work. High quality traineeships for young people - an additional £111 million this year for traineeships in England to fund high quality work placements and training for 16-24 year olds with a view to tripling participation in traineeships. The government will pay employers who provide trainees with work experience £1,000 per trainee. Payments for employers who hire new apprentices - a new payment of £2,000 to employers in England for each new apprentice they hire aged under 25, and a £1,500 payment for each new apprentice they hire aged 25 and over, from 1 August 2020 to 31 January 2021. Courses for school and college leavers - £101 million for the 2020/21 academic year to give all 18-19 year olds in England the opportunity to study targeted high value Level 2 and 3 courses when there are not employment opportunities available to them. Expanded Youth Offer - expand and increase the intensive support offered by the DWP in Great Britain to young jobseekers to include all those aged 18-24 in the IntensiveWork Search group in Universal Credit. Enhanced work search support - £895 million to enhance work search support by doubling the number of work coaches in Jobcentre Plus before the end of the financial year across Great Britain. Expansion of theWork and Health Programme - up to £95 million this year to expand the scope of theWork and Health Programme in Great Britain to introduce additional voluntary support in the autumn for those on benefits that have been unemployed for more than three months.
The Kickstart Scheme One of the main announcements in the Chancellor’s speech related to the introduction of a new Kickstart Scheme to fund the direct creation of high quality jobs for young people at the highest risk of long-term unemployment.
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