How the ‘Mini-Budget’ Supports Employers, Training and Skills Development

Jul 10 2020

This week, Chancellor Rishi Sunak outlined the government’s ‘plan for jobs’ to boost the economy in light of the COVID-19 pandemic. His announcement included a handful of new initiatives and schemes to support both employers and jobseekers to recover after lockdown, furlough, redundancies and wavering consumer confidence.

The Chancellor’s statement included a variety of measures to help people into employment, as well as incentives for employers to employ apprentices and trainees to narrow skills gaps.

Below I’ve highlighted some important changes that might help with your staffing and staff development. There are three key changes:

The government has announced a brand new ‘Kickstart Scheme’. This will, for six months, pay wages for 25 hours per week for 16-24 year olds who were previously on Universal Credit and struggling to find work. Wages will paid at the National Minimum Wage rate, including employer’s National Insurance and minimum auto-enrolment costs. You, the employer, will claim the costs from the government. The scheme is intended specifically for those people who are not yet ‘work-ready’, and the job must be newly created, so it cannot be used to replace an existing worker. I’m sure this scheme will provide some welcome support to those employers with opportunities for inexperienced job seekers.
The Chancellor announced an extension to the existing traineeships programme. This means when operators offer work experience to traineeship learners they will receive £1,000 support funding. Like the Kickstart Scheme, this scheme is intended to help people who are not yet work-ready and need some support to become so.
Lastly, for employers who recruit a new apprentice, there will be a payment from the government (paid in part when the apprentice is taken on, the rest when they complete their apprenticeship) of £2,000 for under 25s and £1,500 for over 25s.

The detail on how these schemes will operate is not yet public. However (and this is a big however), it does appear that if you wish to take on a jobseeker through the Kickstart Scheme, you would be able to employ them as an apprentice and earn the apprentice bonus at the end of the six months period. Equally, should you have a number of opportunities and wish to work with us to run a traineeship programme (which would be a minimum of six weeks long), then your trainees could graduate from that programme onto an apprenticeship programme.

We had hoped that the Kickstart Scheme would be capable of running in tandem with an apprenticeship, thus helping operators to take on new talent and nurture them for a great career in our fabulous industry. Unfortunately, current advice is that the schemes cannot be run at the same time, however, we are working on making a strong case to the government for this to be changed.

It is a little disappointing that the Chancellor did not take this opportunity to open up the Apprenticeship Levy to support non-apprenticeship skills and apprentice wages, to remove the employer contribution for small employers, or to extend access to training support for people who lose their jobs and remain unemployed three months later. We hope these suggestions will be enacted in future announcements.

We have requested more information on the application of the new schemes to see how we can help our partners to navigate them and will be producing full guidance very soon.

Take care, and if there’s anything at all we can help you with please ask. Our friendly teams are available between 8:30 am 5:30 pm, seven days a week, via 0800 093 5892, or email us at [email protected]. Alternatively, you can get in touch with your local HIT contact direct.

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How the ‘Mini-Budget’ Supports Employers, Training and Skills Development