UK businesses are to be paid £1,000 bonuses to hire young people - here’s how the traineeship scheme will work
The UK government has pledged to invest more than £100 million in traineeships for young people, as part of its rescue plan for the country’s economic recovery.
Businesses in England are to be paid £1,000 in bonuses under the new scheme for hiring young people into training programmes.
How will the traineeships work?
Chancellor Rishi Sunak is to announce the “emergency budget” on Wednesday (8 July), which will include new spending measures aimed at creating thousands of jobs.
The £111 million funding for 18 to 24 year-olds is intended to help replace the jobs that were lost as a result of the coronavirus pandemic.
The traineeship initiative will last between six weeks to six months, with young people to receive maths, English and CV writing training, along with guidance on what to expect in the workplace.
The new scheme will include unpaid work experience, but those who work as trainees will continue to be eligible to receive welfare payments during their course.
Employers in England who hire young people into training programmes will be rewarded with a £1,000 bonus payment for every trainee they offer a placement to. Business can then determine how they wish to spend the funds, providing it helps contribute to training.
A Treasury spokesperson said: "The government is making available three times more funding to providers this year to pay for tripling the number of trainees, and also increasing the funding providers receive for training.
"Businesses will also get a £1,000 bonus payment from the government for every trainee they offer a work experience placement to.
"Employers who are new to providing trainees with work experience, or growing their existing offer, will also be eligible for the payment.
"Evidence shows three-quarters of 18 to 24-year-olds who complete traineeships move on to employment or further study within 12 months."
Is the scheme only in England?
The new scheme is to come into effect in England from September 2020.
However, the government has said it will also provide £21 million to the devolved administrations in Scotland, Wales and Northern Ireland to launch similar initiatives.
Work academies are also to be given a £17 million investment, and funding is to be provided for more than 30,000 extra places at sector-based work academies, the Treasury has said.
The funding for young people comes following new data from the Centre for Retail Research that more than 24,000 high street retail jobs have already been lost in the first half of 2020.
Figures also show that nearly 32,000 jobs are still at risk if more stores are forced to close for businesses permanently.
What other help will be made?
In a bid to offer further help to the economy recover from the pandemic, Mr Sunak is also expected to outline plans on Wednesday (8 July) to raise the stamp duty threshold from £125,000 to as high as £500,000.
The move will mean the majority of homebuyers will be exempt from paying stamp duty.
Economic advisers to George Osborne, David Cameron, Theresa May, Philip Hammond and Sajid Javid have also set out a recovery plan which includes a national debt restructuring agency and an unprecedented skills and jobs package.