“Chaotic” £1.9BN Kickstart youth employment scheme fails to deliver for young people, employers or taxpayers, say MPs

In a 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”

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.”

PAC report conclusions and recommendations

6. The Department launched Kickstart very quickly but at the expense of clear guidance and basic management information.The Department designed Kickstart, in summer 2020, as an emergency intervention to address a forecast rise in youth unemployment as a result of the pandemic. Anticipating a surge in youth unemployment at the planned end of the furlough scheme in October 2020, the Department worked intensively to be in a position to start offering Kickstart jobs by this time. In reality, the furlough scheme was extended to September 2021. Basing Kickstart on a previous, similar scheme (the Future Jobs Fund) allowed the Department to design and launch Kickstart in a matter of weeks; however, it also decided to introduce significant design changes which it was unable to trial within its timetable. In order to move so quickly the Department adopted an ‘agile approach’, launching Kickstart as a ‘minimum viable product’, and seeking to refine its details in operation. This created problems engaging with employers and managing the scheme, because Kickstart’s rules were not clear and its systems for producing and monitoring management information were under-developed, denting employers’ and potential Gateways’ confidence that the Department had a grip on how the scheme would work in practice.

Recommendation: The Department should:  

1. a) review how it will be able to maintain the administrative processes and relationships it has established in the Kickstart Scheme, so that in a future recession it will be able to ramp up a successor scheme without having to design administrative processes, guidance and management information from scratch. It should write to us with details of this review within six months; and

1. b) develop and periodically review a ‘recession plan’, with a set of well-designed policy proposals to rapidly address a surge in unemployment, reflecting evidence and lessons from previous schemes in Great Britain and internationally.

7. Many employers have been frustrated at the slow progress in finding suitable people to fill the Kickstart vacancies they have created. The Department initially aimed for 250,000 people to have started Kickstart jobs by the end of December 2021, but in practice take up of the scheme has been slower. Although the number of young unemployed people searching for work has been well over 200,000 in every month since April 2020 and employers have offered well over 200,000 potential Kickstart jobs, there had only been around 100,000 Kickstart job starts by the beginning of December 2021. The Department attributes the slower than expected progress to wider economic and policy factors, such as the extension of the furlough scheme, the reintroduction of national lockdown in early 2021, and the reopening of the economy in summer 2021. The Department also considers that some employers may initially have set their expectations of the available candidates too high. Overall, there were around 144,000 young people claiming Universal Credit and searching for work for more than one year (the long-term unemployed) in September 2021, and the Department did not explain why this volume of people have not moved into the available Kickstart jobs. The Department also lacks data on how long it takes to fill individual Kickstart jobs after they have been approved. Failing to have this kind of basic management information is reflective of a disappointing lack of curiosity from the Department about how the scheme is actually working for employers and the young people that the scheme is meant to help.

Recommendation: The Department should: 

1. a) ensure Kickstart jobs are accessible to the people Kickstart is trying to help, and that employers have realistic expectations about the potential candidates; and

1. b) ensure it is able to record and report accurately on basic measures such as the number of people on Universal Credit that are suitable for Kickstart by location and how long it takes for a Kickstart job to be filled, and should write to us with this data within three months’.

8. The Department plans to evaluate Kickstart but has not set out clearly enough the measures of success, or reported regularly enough on how the scheme is progressing.  The Department plans to evaluate the impact Kickstart has on participants’ long-term employment outcomes, comparing participants’ future employment and time on benefits to similar non-participants. In a job creation scheme like Kickstart there is a risk that some of the jobs funded would be created anyway, or will have other negative effects in the economy, such as job losses elsewhere. The Department does not expect its evaluation to robustly capture Kickstart’s impact on the wider economy, and so it will not know whether its assertion that Kickstart creates genuinely new economic activity is correct. We were surprised by the Department’s apparent lack of curiosity about how much value Kickstart jobs add to the economy and to the employers that participate. Despite our September 2021 recommendation that the Department publish more timely, granular data on its employment support programmes through a quarterly statistical update, it was not until November 2021 that the Department provided detailed, local authority and constituency data on local uptake of Kickstart by employers and participants, and then only in response to a Parliamentary Question. 

Recommendation: The Department should: 

1. set out how, on all its major employment support programmes, it will report progress as it goes along, beginning with Kickstart. It should publish performance data on its programmes on its website on a regular basis, rather than on an ad hoc basis solely as answers to parliamentary questions; 
2. ensure that plans for frequent and granular reporting are built into the design of future employment support schemes, including any proposals that feature in the ‘recession plan’ recommended earlier; and
3. ensure its Kickstart evaluation covers as robustly as possible all of the expected impacts of Kickstart that are given in the business case.

9. Work coaches decide which young people will benefit most from Kickstart but the Department has no way of knowing if they refer the right people to employers. The Kickstart Scheme is available to young people, who are on Universal Credit and whom a jobcentre work coach believes is at risk of long-term unemployment. The Department did not set firm rules to target the scheme, such as rules over how long someone has been receiving Universal Credit, or levels of educational qualifications, and instead relies on individual work coaches to decide based on their understanding of the claimants’ needs and circumstances. The National Audit Office has reported that this work coach discretion is central to the Department’s wider employment support offer, and whilst this person-centric approach is welcome the lack of structured monitoring of how work coaches are helping people towards work means the Department cannot know if it is providing a consistently high quality service to all claimants. The Department has completed only occasional, ad hoc analysis of Kickstart participants’ characteristics, such as their ethnicity or educational attainment to try to understand how the scheme has been targeted. 

Recommendations: The Department should use management information to monitor and manage how work coaches are deciding what support would work best for different claimants. The Department should also implement our previous recommendation, which it accepted, to publish a full evaluation of how well its work coaches provide employment support and how consistently they apply their judgement, by December 2022. 

10. The Department does not monitor properly how well employers are supporting Kickstart participants. The Department pays £1,500 per Kickstart participant to employers to fund set-up costs and employability support for Kickstart participants, which it hopes will make participants more employable in the future. However, it does not specify or offer detailed guidance or signposting on what employers should provide for this money and does not routinely collect data on what they actually do provide. Additionally, where employers are involved with the Kickstart Scheme through a Gateway, this funding goes directly to the Gateway and the Department has no visibility of how the money is distributed to employers, or how Gateways apply checks on employers they manage. The Department was interested in whether it could have given more leeway to allow gateways to hold back the £1,500 employability support payments until employers demonstrated it would be spent wisely, speaking about this in the context of the planned evaluation. The Department does investigate specific, potentially serious concerns that its staff or young people raise, and also has a team of Kickstart District Account Managers who discuss job quality and employability support with employers and Gateways. However, information from these discussions is not collated centrally, and the Department seemed to be overly reliant on anecdotes and to lack the tighter metrics and data to assure itself that that the scheme is working as intended. When the Department finds out that an employer is providing no employment support to a young person, or employment support that is not up to scratch, it is not clear that it is able to claw back the £1,500 it has given them to provide this support.

Recommendation:

The Department should set out clear and specific expectations from employers and Gateways to ensure that Kickstart participants get the experience and the employability support that they have been promised, and it should begin examining a sample of Kickstart placements each month to help ensure that these expectations are being met.   The Department should write to us with an update on this work in three months’ time.  

In addition, the Department 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.   

11. It is not clear how the Department uses Kickstart in tandem with its other employment support to best sustain young people in work. The Department aims to provide tailored help based on work coach’s understanding of the claimants they work with. However, it is not clear that there is a managed “pathway” or sequence of interventions for each young person, such as somebody who needs to build confidence before they are ready to apply for an open market or Kickstart job, or what engagement there is with employers to sustain employment after Kickstart. It is hard to see how the Department is using Kickstart in concert with its other employment schemes, though the Department reassured us that Kickstart participants could go on to take part in apprenticeships. We were disappointed however, at the lack of clarity on whether anyone in the Department, or the Department for Education, is responsible for making sure that a conversation with a Kickstart employer about apprenticeships actually happens. 

Recommendation: The Department should work out the best blend of all the support it offers to help Universal Credit claimants be confident to apply for a job, give each individual the best chance of getting that job, and work with employers to sustain jobs. 

It should set out the criteria by which it will determine which form of employment support it offers will be most appropriate for different Universal Credit claimants, given their age, needs, skills, and employment history. In addition, it should make sure that either itself, or the Department for Education, talk to all Kickstart employers to make sure they know what other employment schemes they could get involved in, including apprenticeships.  /ENDS

Notes:

Full inquiry info: https://committees.parliament.uk/work/1580/dwp-employment-support-2-kickstart-scheme/

The Committee’s previous, wider inquiry into DWP support for employment: https://committees.parliament.uk/work/1263/dwp-employment-support/news/157314/dwp-unable-to-explain-shocking-inequality-as-unemployment-among-young-black-people-surges-to-416-in-pandemic/