UPDATED: Rishi Sunak will give small businesses £2000 grants per trainee if they take on young people for training schemes.
The scheme, which was announced today (Wednesday) as part of the chancellor’s economic Summer Statement, will throw ens of thousands of young people a lifebelt against the coming tsunami of post Covid-19 unemployment.
The Bank of England has predicted that unemployment will rise to 10 per cent this year, as employees are weaned off the Coronavirus Job Retention Scheme from August.
Small businesses that offer training for young people aged between 16 and 24 will be given cash “bonuses” of grants worth £2000 per youth up to a maximum of £10,000 per firm.
This unpaid on-the-job training is seen as a gateway to an apprenticeship and, ultimately, full-time work.
The £111m scheme is the first-time small businesses will receive direct government subsidies for taking on trainees.
A Treasury spokesman said businesses would get a £2000 bonus payment “for every trainee they offer a work experience placement to”, and employers who were “new to providing trainees with work experience will also be eligible for the payment”.
The chancellor is increasingly concerned that young people will bear the brunt of the economic cratering from Covid-19 and has said that he regards it as a matter of “social justice”.
Mr Sunak told the Telegraph: “Young people are on the front line at risk of unemployment, so we’re backing them and the companies that they can learn from. We know traineeships work so we’re investing in their skills and our collective future.”
A traineeship is a course with work experience that helps prepare young people for work or an apprenticeship. It can last up to six months and applicants receive work placements and help with writing CVs, as well as English and Maths tuition if required. The positions are unpaid, but employers cover expenses and the cost of courses.
Three quarters of 18 to 24-year-olds who complete traineeships move on to employment, or further study within 12 months, says the government.
In 2019 there were 15,000 young people taken on in traineeships, and the new scheme is expected to triple that number.