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Insights // 10 July 2020

What Does the Government's 'Plan for Jobs” Mean for Employers and Workers?

Partner Sue Dowling, head of our Employment Law team, summarises the new measures announced in the Chancellor's 'mini budget' that will affect employers and workers. 

In a special ‘summer statement’ on 8 July and under the ‘Plan for Jobs’ umbrella, Chancellor Rishi Sunak announced further measures designed to help protect jobs in the longer term following the planned ending of the Coronavirus Job Retention Scheme (also known as the Furlough Scheme) on 31 October 2020 and amidst a continued economic downturn.

According to the Government, more than nine million workers have been placed on furlough leave since the introduction of the Scheme.

As part of a new £30 billion stimulus package, that takes the total cost of the Government’s response to the COVID-19 pandemic closer to £200 billion, Mr Sunak unveiled the following measures:

Job Retention Bonus

Employees who successfully bring their staff back from furlough leave and retain them in continuous employment until 31 January 2021 will receive a ‘Job Retention Bonus’ of £1,000 per employee. Payments will be made from February 2021.

To be eligible, an employee must earn above the Lower Earnings Limit of £520 per month on average between the end of the Coronavirus Job Retention Scheme and the end of January 2021. Further information on the Scheme is expected before the end of July.

You may also find our earlier blog articles, ‘Chancellor Extends Furlough Scheme Until October - A Summary’ and ‘Flexible Furlough Scheme Announced - What is Flexible Furlough?’ helpful.

Kickstart Scheme

£2 billion has been set aside to fund a new ‘Kickstart Scheme’, that according to the Government aims to “create hundreds of thousands of high quality six month work placements aimed at those aged 16-24 who are on Universal Credit and are deemed to be at risk of long-term unemployment.”

The available funding will equate to 100% of the National Minimum Wage up to 25 hours per week, plus an employer’s National Insurance contributions and minimum pension contributions.

Apprenticeships

Employers in England will receive a one off payment of £2,000 for every new apprentice under the age of 25 hired between 1 August 2020 to 31 January 2021, and a £1,500 payment for each new apprentice aged over 25 and hired during the same period.

Existing payments of £1,000, payable to employers hiring new apprentices aged 16-18 and those under 25 with an Education, Health and Care Plan will continue to be paid.

Traineeships

The Government plans to fund ‘high quality’ work placements and training for those aged 16-24 by increasing its support for traineeships threefold with an additional £111 million in funding.

The Government will provide £1,000 per trainee to employers who provide trainees with work experience and widen the eligibility criteria to those with a Level 3 qualification and below.

Support services

The Government has said that it will provide an additional £32 million over the next two years to the National Careers Service, to provide people in England with “personalised advice on training and work”.

The government will provide £101 million for the 2020-21 academic year to give all 18-19 year olds in England the opportunity to study targeted high value Level 2 and 3 courses when there are not employment opportunities available to them.

There are also plans to double the number of work coaches in Jobcentre Plus centres by next spring, at a cost of £895 million.

Please see the Gov.uk website for full details and for further information on the measures announced today, including a VAT reduction for the hospitality and tourism sectors.

You may also find out recent blog articles, 'What is a Settlement Agreement and What Should It Contain?', 'Collective Consultation - Multiple Redundancy Situations Explained' and 'Life After Furlough Leave - Employment Issues Which May Face Employers' useful .

For further information or legal advice, please contact law@blandy.co.uk or call 0118 951 6800. 

This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.

Sue Dowling

Sue Dowling

Partner, Employment Law & Venue Licensing

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