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“Chaotic” £1.9BN Kickstart scheme for youth employment fails to deliver for young people or taxpayer

25 February 2022

In its report published today the Public Accounts Committee says it supports the Department for Work and Pensions’ “intention of supporting young people into work at what was expected to be a downturn in employment opportunities” - but the £1.9 billion “emergency intervention” Kickstart scheme has supported far fewer young people than predicted, “early delivery was chaotic” and DWP “neglected to put in place basic management information that would be expected for a multi-billion-pound grant programme”.

Over one year since the scheme was launched, with “stronger than expected economic growth”, DWP is now forecasting that Kickstart will support far fewer young people than envisaged - 168,000 vs original prediction of 250,000 - and will cost £1.26 billion.

But despite more favourable than predicted economic conditions, many young people who joined Universal Credit at the start of the pandemic have remained on the benefit, and DWP doesn’t know why these people have not moved into Kickstart jobs. In December 2021 the PAC reported that DWP could also not explain the ‘“shocking inequality” as unemployment among young black people temporarily surged to 41.6% in the pandemic, from a high pre-pandemic rate of 24% - unemployment in young white people had increased from 10.1% to 12.4% over that time.

The Committee says DWP also does not actually know what employers are providing with the £1,500 employability support grants they get for each young person they take on through the scheme.  It says DWP “should ensure that it is able to, and does, claw back employment support costs where the employer has not used the money in line with its expectations, and allow Gateways to withhold the £1,500 employment support until employers demonstrate high quality employability support”

Chair's comments

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said:

“There are very unfortunate similarities across Government’s Covid response schemes: rushed implementation and too little track kept of whether a scheme was delivering what it promises – even given the unprecedented pressures at the start of the pandemic. In this case the department simply has no idea whether this scheme was worth the money, not least because it has little idea what was delivered for it.

DWP set up a scheme with good intentions but with no proper way of measuring its success for young people seeking work. It enabled employers to spend money for placements with no method of recovery if the job did not last. Employers were frustrated by how hard it was to find suitable candidates for the jobs they created – and ultimately the scheme reached far fewer people than predicted.”

Further information

Image: PA