On 08 July 2020, Chancellor of the Exchequer Rishi Sunak announced his ‘Plan for Jobs’ in the summer statement in the House of Commons. This is all in the light of the wind-down of the Coronavirus Job Retention Scheme and the recognition that employers may be considering redundancies and / or not recruiting young workers (16 to 24).
The Plan for Jobs has 4 policy decisions, 2 of which offer financial incentives and are discussed in more detail below:
Job Retention Bonus
Whilst full details have yet to be announced, a Coronavirus Job Retention Bonus will be paid to UK employers for every furloughed employee who is retained and remains continuously employed through to the end of January 2021. This is as long as the employee earns, on average, above the Lower Earnings Limit (£520 per month) between the end of the Coronavirus Job Retention Scheme (October 2020) and the end of January 2021.
The ‘carrot’ is that employers will receive a one-off payment of £1,000 per retained employee (who was previously furloughed). Details and guidance of payroll’s involvement are expected at the end of July 2020.
This has a number of initiatives, 3 of which are below. Where they will apply is impacted by the devolution of skills and education:
These will apply in Great Britain.
A ‘Kickstarter’ will be someone on a six-month work placement, aged 16 to 24 and in receipt of Universal Credit.
The ‘carrot’ to entice employers is that they will be fully funded by the UK Government in terms of:
- 100% of the age-related National Minimum Wage for 25 hours a week
- The associated employer National Insurance Contributions, plus
- Employer minimum automatic enrolment contributions
We await details of this with interest.
The UK Government will triple the number of traineeships in England. These are unpaid and give access to training for people aged 16 to 24, subject to eligibility criteria. The expanded scheme will be in place from September 2020.
As well as the above genetic guidance on Gov.UK, this House of Commons Library document provides guidance to prospective employers and providers of traineeships.
The ‘carrot’ for employers to offer traineeships is that the UK Government will pay £1,000 per traineeship offered.
This is where an employer takes on an apprenticeship under an approved Standard in England (such as the Payroll Administrator Apprenticeship). These are not apprenticeships based on Frameworks that apply in other UK nations.
The UK Government will offer the following carrots for apprentices hired between 01 August and 31 January 2021:
- £2,000 to employers for each new apprentice hired under the age of 25
- £1,500 to employers for each new apprentice hired aged 25 and over
This payment is in addition to the existing £1,000 payment that the UK Government already provides employers for recruiting:
- New apprentices between 16 and 18 or
- Apprentices between 19 and 24 years old where there is an Education, Health and Care (EHC) plan in place (provided by their local authority) or has been in the care of their local authority
The Department for Education has issued updated guidance regarding apprenticeship funding in England. This elaborates on the above information including details of eligibility – a new contract start date between 01 August 2020 and 31 January 2021 and not have been employed by that employer within the six months prior to the start date.
It would appear that the financial carrots offered for taking on an apprenticeship appear to outweigh the other initiatives. There were financial incentives previously, and now there are greater ones.
For more information on the UK Government Plan for Jobs, the following document is an interesting read as it contains all of the initiatives (including ‘Protecting Jobs’ and the ‘Eat Out to Help Out’ scheme and ‘Creating Jobs’).