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Employment

What’s in Rishi Sunak’s £500m plan for jobs?

Rishi Sunak has announced a £500m plan to help furlough-leavers and those claiming universal credit in to work, but how?

In an attempt to cushion the end of furlough for over a million people, Chancellor Rishi Sunak has ring-fenced £500m for schemes and support to help people back to work. We break down who the plan is set to help, and how.

Why has he announced the plan for jobs extension?

Hundreds of thousands more workers will be looking for work this autumn after furlough ended on September 30. Despite a gradual fall in recent months, unemployment stands at 1.5 million, almost 200,000 higher than before the pandemic. 

As many as seven in ten UK employers are expecting to make redundancies within the next year, according to research from Renovo Employment Group.

The government has received heavy criticism from charities and the Labour party for the triple whammy of ending the furlough scheme, increasing national insurance, and removing the £20 increase to universal credit brought in at the start of the pandemic. Some 40 per cent of people claiming universal credit are in work, but the chancellor used his speech to encourage faith in work and away from state support, asking: “is the answer to their hopes and dreams just to increase their benefits?”

“Good work, better skills and higher wages” will be the approach taken, he promised, rather than increasing benefits so that people could “lean ever more on the state”.

How effective this approach may be has been met with skepticism.

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What will the £500m pay for?

The package will prioritise helping furlough-leavers and those receiving universal credit to find work.

Starting in April 2022, the government will expand its program of support to people who are already in work, offering them access to a work coach support who will focus on career progression advice. Job Centre Plus specialists will also work with local employers to identify opportunities for people to progress in their career.

The Job Finding Support scheme which will provide practical support including mock interviews for people unemployed for less than three months.

Sunak will extend the Job Entry Targeted Support scheme — often referred to as ‘Jets’ — to September 2022 for those who have been unemployed for more than three months. The scheme first launched in October 2020 with £238 million investment dedicated to supporting those left jobless due to Covid-19.

In December 2020 the government reported more than 800 jobseekers per day were being referred to Jets, which offered specialist advice on how people can move into growing sectors, as well as CV and interview coaching.

Who will the schemes target?

Young people furthest from the jobs market and older people are the most likely to struggle to enter or rejoin the workforce, and are the main targets of Sunak’s plan for jobs.

HIs plans include schemes specifically designed to help young people, many of whom were are at the start of their careers while on furlough or lockdown so have missed out on opportunities to gain work experience. Artificial intelligence also formed a surprise centre-piece of the speech.

“I am announcing that we will create 2,000 elite AI scholarships for disadvantaged young people” Sunak said, after touting the UK as a world leader in the technology.

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The scholarships will “ensure that the most exciting industries and opportunities are open to all parts of our society” he said.

He confirmed an extension of the Kickstart scheme until March 2022 which provides funding to create jobs for 16-24 year olds. The scheme, which funds six-month work placements for young people on Universal Credit, received £2 billion to run until December 2021.

The government’s youth offer will also be extended to 2025, with eligibility expanded to include 16 and 17 year olds in addition to 18-24 year olds. The offer provides additional support to unemployed young people on universal credit who via youth hubs and specialised employability coaches.

The £3,000 incentive payments for businesses who hire apprentices will be extended up until 31 January 2022.

Some older workers will be able to resume where they left off earlier in the pandemic, but “many others are likely to find that furlough was only a temporary reprieve and that their old jobs are gone for good,” said Caroline Abrahams, Charity Director at Age UK.

Sunak is offering older workers a “new enhanced support package to help them to stay in and return to work.” For those who are claiming universal credit, this will include more intensive, tailored support as they look to take the next step in their career.

How have people reacted to the announcement?

President of the Resolution Foundation, Lord Willetts, praised Sunak for “putting productivity-enhancing tech at the heart of his post-Brexit vision for Britain.”

“He is right that in the long run it is innovation and investment that will boost productivity and pay,” he continued.

Sunak angled his speech at the Conservative Party conference to suggest that rather than simply increase benefits for people who are struggling – suggesting that this is the approach a Labour government would take – that he would create more opportunities to get people in to work instead. This approach was dismissed as “completely wrong” according to one anti-poverty think tank.

“It is completely wrong to suggest there is a trade-off between good jobs and adequate social security when they are both essential to improving people’s living standards,” said Helen Barnard, deputy director of the Joseph Rowntree Foundation.

“The chancellor may say he has a plan for jobs but he has no plan for paying the bills.”

She went on to criticize his refusal to cancel the government’s plan to remove the £20 universal credit uplift which will cut the “incomes of around 5.5 million families by £1,040 a year on Wednesday when we are facing a cost of living crisis.”

Shadow chief secretary to the treasury Bridget Phillipson said the plans don’t go far enough, with the chancellor’s speech shows that he is “in denial about the scale of the economic crisis he has overseen.”

“Instead of putting forward a plan to boost our economy and invest in the skills we need and the challenges we need to face, he’s pretending there’s no work to be done,” she continued.

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