Yahoo Finance Why the Chancellor’s ‘kickstart’ scheme won’t help university graduates
Aspiring lawyers, accountants and other ambitious graduates have been left behind by the Government’s new ‘kickstart’ scheme as it will push people into low-paid work with minimal career progression, experts have warned.
Chancellor Rishi Sunak announced a £2bn package to get 16 to 24-year-olds into work. One part of the policy will see the state pay the wages of young people on Universal Credit for six months. This will exclude the majority of university leavers and even those able to take part will be offered just 25 hours work a week, paid at the national minimum wage.
Peter Cheese of the CIPD, a trade body, said: “Similar schemes in the past have floundered, as employer pick up was low or largely limited to low-paid opportunities in the public or charitable sectors.” He warned the same challenges were likely to face the kickstart scheme.
Around 700,000 young people will enter the jobs market this year. For many their aspirations have been dashed as thousands of graduate jobs and schemes have been cut.
Recruitment of university leavers fell by 76pc between January and May, according to jobs site Adzuna. Major employers such as the big banks, consultancies, accountants and law firms were among the first to axe opportunities.
Lloyds Banking Group, HSBC, PwC and BDO all delayed or cancelled recruitment schemes and internships.
Michael Buckworth of law firm Buckworths said graduates looking to work in areas such as law or finance would not benefit from the scheme. “It’s focused on keeping people employed in less-skilled roles – particularly those in the hospitality sector,” he said.
The financial incentives for the kickstarters themselves do not hold much appeal either. The national minimum wage is currently £8.20 an hour for 21 to 24-year-olds, £6.45 for 18 to 20-year-olds and £4.55 for those under 18.
A 21-year-old university graduate working 25 hours a week would earn just £205 a week, or £5,330 over the six months. Employers can choose to pay them a better rate or give them more hours if they wish.
The Chancellor also announced grants for employers taking on new trainees, however these too will be focused on sectors such as construction and social care as opposed to traditional graduate career paths.
Employers would receive £1,000 for every job they create – a carrot Mr Buckworth said would not be tempting for bigger businesses. “Although they may well be attracted by the positive image it creates,” he added.
The number of advertised graduate roles in accounting and finance is down 38pc compared with this time last year, according to data from jobs website CV-Library.
Those in the legal sector have fallen by a fifth. One of the very few areas to be in positive territory is the public sector, where the number of graduate jobs has more than doubled since last year.
The website's Lee Biggins said: “Graduates with high aspirations for their careers may need to settle for less and look to work in an industry where there are more jobs available, such as the public sector.”
Some 410,000 people aged between 18 and 24 are unemployed and an extra 620,000 are expected to be out of work by the end of the year, according to think tank the Institute for Public Policy Research.
