On Wednesday 8th July the Chancellor gave his ‘Summer Statement’ where he announced a series of initiatives designed to help the UK economy as it emerges from the Coronavirus lockdown.
The statement comes ahead of the Autumn Budget and includes plans to protect jobs, help for younger workers and the winding down of the furlough scheme.
End of the Furlough Scheme
To encourage businesses to keep employees in employment when the Job Retention Scheme finishes at the end of October, the Chancellor has announced a ‘job retention bonus’. A one-off payment of £1,000 will be paid to employers for every furloughed employee retained until the end of January 2021. This will apply to workers who have earned an average of over £520 per month each month after the furlough scheme ends. Further details are expected by the end of July with full guidance being available in the autumn.
The Government has also announced plans for a ‘Kickstart’ scheme with the intention of helping young people secure jobs.
The scheme will pay employers directly if they create NEW jobs for any 16 to 24 year old who is at risk of long-term unemployment. It’s important to stress that these jobs must be entirely new jobs or roles, not existing ones that need filling and in order to claim the money, businesses must be able to evidence this.
The jobs must also provide the employees with at least 25 hours per week, paid at minimum wage. Businesses must also evidence that they have provided the ‘kick-starters’ (young workers) training and support to find a permanent job.
The Government plan to set aside an initial £2 billion to cover this scheme and have said that where employers can meet the criteria of the scheme, they will pay the young people’s wages for six months, plus an amount to cover overheads. So, for a 24 year old the amount they will pay equates to around £6,500.
Employers can apply next month, with the Government hoping the kick-starters can be in their role by Autumn.
There is no cap on the number of places available.
New Apprenticeship Grants
Rishi Sunak said employers will be paid £1,000 to take on new trainees, to encourage those businesses in high demand sectors (Engineering, Construction and Social Care) to bring on 18-19 year olds.
For the next 6 months the Government will pay employers to create new apprenticeships, “We’ll pay businesses to hire young apprentices, with a new payment of £2,000 and we’ll introduce a brand new bonus for businesses to hire apprentices aged 25 and over, with a payment of £1,500.”
No doubt further details on all of these initiatives will emerge over the coming weeks and months, however if you have any questions in the meantime please contact the ProAktive Employment Team on 01302 341 344.
By Louise Turner Dip Mgmt (Open) Assoc CIPD – HR Business Partner