On 8 July, Rishi Sunak delivered his summer statement. The Chancellor of the Exchequer laid out the measures the government is introducing to try to restart the economy, as social distancing measures ease and the Job Retention Scheme comes to an end.
Experts and commentators have noted that many of the measures announced are tried and tested ways of seeking to avert a recession. However, there has also been a degree of consensus that these measures might not be at the scale needed to meet the economic challenges on the horizon and to stave off mass unemployment.
Having said this, Rishi Sunak was clear in his speech that he would be willing to announce further measures, as circumstances develop.
“Our Plan for Jobs will not be the last action – it is merely the next – in our fight to recover and rebuild after coronavirus.”
In this blog we look at some of the measures announced, and what they might mean for Locality members.
The Job Retention Bonus
The government will pay employers £1000 for every member of staff brought back from furlough and employed continuously through to January. These members of staff may have already returned from furlough or may still be furloughed.
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 to employers in February 2021.
The Kickstart Scheme
Through this scheme, the government will directly fund employers to create ‘high-quality six-month work placements’, for 16-24-year-olds at risk of long-term unemployment. The scheme will be aimed at those on Universal Credit.
Funding will cover 100% of the relevant National Minimum Wage (according to age bracket) for 25 hours a week, for a six month period. They will also cover ‘employer National Insurance contributions and employer minimum automatic enrolment contributions.’ For a 24-year-old on the highest National Minimum Wage bracket, this would equate to roughly a £6,500 grant to the employer.
With no more detail than this, at this stage, it might be useful to compare this announcement with the Future Jobs Fund, devised in 2009 to tackle the rise in youth unemployment that came about after the global financial crash. Many voluntary and community sector organisations provided placements to young people via Future Jobs Fund grants.
Depending on the eligibility criteria for the Kickstart Scheme, it could be that many community organisations provide a natural home for these placements. Locality will be contacting relevant government officials to find out more about the scheme, its contracting arrangements, and its scope, as soon as possible.
From 15 July 2020 until 12 January 2021, there will be a temporary VAT cut to 5% for food and non-alcoholic drinks. This will apply to supplies of food and non-alcoholic drinks from restaurants, pubs, bars, cafés, and similar premises across the UK. It is hoped this will drive consumption at businesses in the hospitality industry hardest hit by the coronavirus crisis. For Locality members running cafes, this will hopefully have some impact in incentivising people to start using your premises again.
‘Eat Out to Help out’ scheme
This is perhaps the most widely covered of the schemes announced yesterday. It will give people 50% off meals in participating restaurants during August. The discount will cover up to £10 per head and only be able to be used Monday – Wednesday. Guidance will be published on 9 July, restaurants and other eligible outlets can register for the scheme from 13 July. More detail can be found here.
Public Sector Decarbonisation Scheme
The government will invest £1 billion over the next year in a Public Sector Decarbonisation Scheme that will offer grants to public sector bodies, including schools and hospitals, to fund both energy efficiency and low carbon heat upgrades.
Locality will be contacting relevant government officials to see which buildings are eligible for support through this scheme. We will be making the case that community centres run by community organisations should be within scope.
Expansion of the Work and Health Programme; and the Flexible Support Fund
Some Locality members may already deliver Work and Health programme contracts. The government will ‘provide up to £95 million this year’ to expand the scope of these programmes, for those on benefits that have been employed for more than three months.
The Flexible Support Fund will see a £150 million increase in funding. This might be something to which Locality members signpost people they are working with.
An expanded Youth Offer
The government will expand and increase the intensive support offered by DWP in Great Britain to young jobseekers, to include all those aged 18-24 in the Intensive Work Search group in Universal Credit.
- Stamp Duty cut. This will apply to properties under £500,000
- Doubling the number of work coaches. These coaches are the first point of contact for someone who loses their jobs and comes for help –DWP roles based in Job Centres.
- Payments for employers hiring new apprentices. £2,000 to employers for each new apprentice they hire aged under 25. £1,500 for each new apprentice over 25.
- A plan for jobs – full document
- Institute for Fiscal Studies analysis of the Chancellor’s Summer Statement
- National Institute for Economic and Social Research analysis of the Summer Statement
- Resolution Foundation analysis of the Summer Statement
- Institute for Employment Studies analysis of the Summer Statement