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Summer 2020 Economic Update

By July 9, 2020February 18th, 2021Employment for Business, For Business

On 8 July 2020, the Chancellor, Rishi Sunak, delivered the Summer 2020 Economic Update, setting out the second phase of the Government’s plan to help the recovery of the UK’s economy following the COVID-19 pandemic.

Several of the Chancellor’s announcements will be of interest to employers.

New retention bonus

The Furlough scheme is due to end on 31 October 2020. However, in order to encourage job retention, the Chancellor has announced a £9 billion pound initiative to reward employers who bring furloughed employees back to work. Businesses will be paid a one-off bonus of £1,000 for each furloughed worker they bring back to work and retain in employment until at least 31 January 2021. This bonus will apply to all workers earning an average of over £520 per month in the UK.

Kickstart Scheme

The government will introduce a new Kickstart Scheme to fund the direct creation of high quality jobs for young people at the highest risk of long-term unemployment.

The government will pay the wages of eligible workers for a period of six months, while they complete a job placement. There will be no cap on the number of placements available and for each new placement, the government will cover the cost of 25 hours’ work a week at the applicable National Minimum Wage rate. Employers may top up the government’s contribution.

The scheme will open for applications in August with the first wave of placements starting in the Autumn and it is expected that further details on the application process will be published shortly. The scheme will cover England, Scotland and Wales, with funding to be provided to Northern Ireland for a similar scheme.

Training and apprenticeships

The government will support new apprenticeships with bonuses, with employers being entitled to a payment of £2,000 for each new apprentice they hire under the age of 25 and £1,500 for each apprentice aged 25 or over from 01 August 2020 to 31 January 2021.

These payments will be in addition to the existing £1,000 payment the government already provides for new 16-18 year-old apprentices, and those aged under 25 with an Education, Health and Care Plan.

The government has also pledged to double the number of Jobcentre work coaches to provide additional support to young jobseekers. The Chancellor also set out plans for a £32 million investment in the National Careers Service.

Details of how to apply to these schemes are expected to be released in due course.

The Chancellor also announced various measures to get the tourism, hospitality and construction industries moving again.

Stevi Hoyle

Author Stevi Hoyle

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