U.K. Finance Minister Rishi Sunak just announced the British government will invest £2 billion ($2.5 billion) to help more young people find jobs, with an additional £1.6 billion to be invested in training and apprenticeship programs.
In Sunak's "mini-budget" on Wednesday, the finance minister outlined measures to help young people, whom he acknowledged had been "hardest hit" by the coronavirus pandemic's impact on employment.
Sunak highlighted that more than 700,000 people are due to leave education in the U.K. this year, with many more just starting out in their careers. He also pointed out that those aged under 25-years-old were two-and-a-half times more likely to work in a sector that had been closed during lockdown.
"We cannot lose this generation," said Sunak, announcing the government's new "kickstart scheme."
The £2 billion program applies to those aged 16-24, claiming social security payments, known as "universal credit" in the U.K., and who are at risk of long-term unemployment.
That funding will cover a six-month job placement paid at the national minimum wage for 25 hours a week.
The U.K. national minimum wage ranged from £4.55 to £8.20 per hour in 2020, depending on your age bracket. Sunak said this means that for someone aged 24 on this program, the six-month grant would be around £6,500 and employers can top up this pay.
He said employers could start to apply to take part in this scheme from next month and the first "kickstarters" would be in their new jobs in the fall.
"And I urge every employer big or small, national or local, to hire as many kickstarters as possible," Sunak said, adding that there would be no cap on the number of places available on the program.
Sunak also announced another £1.6 billion would be invested in training and apprenticeships, referring to the fact that 91% of apprentices stay in work or do further training after completing their program.
He said that the government would pay businesses £2,000 for every new apprentice they hire under the age of 25, in addition to the £1,000 it already provides for 16-18 year-olds and those aged under 25 with special education needs.
The finance minister then announced a new "bonus" payment of £1,500 for businesses that take on apprentices aged 25 and over.
Meanwhile, the government is set to invest £111 million in traineeships in 2020 and 2021, which are the typically the programs that combine study and a work placement, prior to an apprenticeship. So employers will be paid £1,000 for taking on new trainees, which Sunak said would triple the number of places in this scheme.
Another £17 million is to be used to triple the number of places in sector-based work academies, where people are trained, offered work placements and guaranteed a job interview for roles in industries with high demand.
In order to bolster careers advice provisions for young people, the U.K. government plans to double the number of work coaches to 27,000, through an investment of £900 million. This is along with a £32 million investment into the U.K.'s government-backed National Careers Service.
More broadly, Sunak said that although the government would be winding down its furlough scheme in October, those employers that bring someone back and continue to employ them until January would be paid a "bonus" of £1,000 per employee.
The U.K.'s furlough scheme has allowed employers to put workers on temporary paid leave during the coronavirus pandemic, with wages part-subsidized by the government.
Sunak said that this bonus scheme would be worth around £9 billion if employers brought back every single one of the 9 million people furloughed.
However, the government has faced criticism for ending the furlough scheme too early, over fears that millions of jobs could be lost.