Govt’s youth employment scheme could cost 20K per new job, says think tank

The Kickstart Scheme provides funding to employers to create jobs for 16 to 24 year olds on Universal Credit.

Commenting on the National Audit Office’s interim report on the scheme, Professor Len Shackleton, labour market expert at free market think tank the Institute of Economic Affairs, said:

“Youth unemployment threatened to explode during lockdown, and it was not surprising that the government felt the need for preemptive action. One result was the Kickstart scheme, which aimed to subsidise employers to create up to 250,000 jobs.

“The NAO’s report suggests that the scheme has been slow to start, is not properly monitored, and may simply be subsidising jobs which would have been created anyway. The subsidy per job is costed at £7,000. However, if only 30 per cent of such jobs are ‘additional’, as one Department for Work and Pensions estimate suggested and now seems very plausible, the cost per new job rises to well over £20,000.

“In these respects Kickstart resembles many previous government job creation schemes which have had much less effect than their architects claimed.

“The NAO also points out that the expected surge in youth unemployment has not occurred, partly as a result of furlough support and partly because the jobs market has recovered quickly, currently with a record 1.2 million vacancies. Despite this, the DWP is persevering with Kickstart.”