Still time to rethink the Restart Scheme

Executive Summary: Despite the success of the furlough programme, unemployment has risen and will do so dramatically when the programme ends. Unemployment hits both extremes of age groups disproportionately and the proposed solution has been proven as poor value for money. A bolder, win-win proposal helping to solve both unemployment and climate change is the way forward.

The Coronavirus Job Retention Scheme is rightly heralded as a success in saving the livelihoods of employees whose businesses were forced to close during successive lockdowns. The scheme, which paid up to 80 per cent of the wages of around 9.5 million people (now about 4 million) from March 2020, could surpass the ￡50 billion price tag by the time it ends at the end of April 2021 (the smart money is betting that this will likely be extended through the end of June).

Not all jobs were saved though; job losses were disproportionately suffered by the younger (18-24s) and older (50-64s) segments of the workforce. According to the latest ONS figures, unemployment grew by 411,000 in the past year, with 112,000 aged 18-24 and 111,000 aged 50-64. On a percentage basis, the hardest hit cohort were males aged 50-64 where the rise in unemployment swelled by nearly 50%.

To tackle rising unemployment the government has initiated the Kickstart Scheme and the Restart Scheme. The Kickstart Scheme provides funding to employers to create job placements for 16 to 24 year olds on Universal Credit, the UK's safety net for those out of work with less than ￡16,000 in savings. The Restart Scheme will give Universal Credit claimants who have been out of work for at least 12 months enhanced support to find jobs in their local area. It is the Restart Scheme I'd like to focus on.

Restart Scheme, really?

Launched to much fanfare in late November 2020, the Restart Scheme is 2011's Work Programme in all but name only. The results of this make you wonder why it has been resurrected as 73% of people who had participated in the program were not in work. You read that correctly; 73% did not find permanent work despite ￡2.8 billion in expenditure or ￡4,570 for each person who found work. Despite its cost cost to the taxpayer, the promised training was primarily limited to CV writing and interviewing skills, very little training focused on employable skills.

Therefore the Restart Scheme is not a smart spend; it lacks ambition and misses a major opportunity. What is needed is a bolder win/win strategy for society, the environment and the unemployed along the lines of the original New Deal; a Green New Deal Program if you will.

For those unfamiliar with it, the New Deal was a series of programs enacted by President Franklin Delano Roosevelt in the United States between 1933 and 1939. One of the programs was the Civilian Conservation Corps (CCC). The CCC was established in 1933 to address unemployment during the Great Depression. The CCC provided national conservation work, which included duties such as planting trees, building flood barriers, fighting forest fires, and maintaining forest roads and trails. Most state and national park systems were started through the CCC program with an estimated 800 parks constructed across the nation that enjoy widespread use today.

The gist of the program was to take unemployed young men (yes, men only as it was 1933 after all) send them away to the countryside for 6 months on various environmental projects with scope for further training at the end of the work day. This was coordinated and managed by the US Army and included 1,800 educational advisers and 24,000 skilled labourers enlisted as instructors. Participants earned a weekly wage, most of which was sent directly to their family back home.

A New Deal for Today

Obviously, the model will need to be updated for the 21st century, so let me provide one concrete example as to how it could work:

The UK has some of the least energy-efficient housing in Europe – most of it built before environmentally efficient design was regulated. It is estimated around a quarter of the UK’s total greenhouse gas emissions come from the energy we use for heating, lighting or running appliances in our homes, public buildings or workplaces – and energy used in our homes is the most significant source.

Point 1 of Boris Johnson's 10 point plan for getting us to net zero carbon by 2050 says: "Making our homes, schools and hospitals greener, warmer and more energy efficient, whilst creating 50,000 jobs by 2030, and a target to install 600,000 heat pumps every year by 2028."

Besides insulation, the installation of heat pumps to replace gas boilers is a sound idea that pays for itself over time but the market has not yet addressed this problem. There are over 130,000 businesses set up now to replace your old gas boiler with a new one and less than 1,000 qualified heat pump installers to help households make the switch.

The absence of installers places a significant barrier to reaching the PM's goal. It is estimated that 40,000 installers will be needed by the end of this decade so the obvious win/win is for the government to subsidize the training to qualify as a licensed installer. As stated above, the government paid ￡4,500 per successful candidate who found work through the Work Programme and this would be a fraction of that cost.

The vaccination programme has demonstrated that this country is capable of the unbelievable if all parties are aligned and committed to a goal. Climate change and the reskilling of our workforce would yield similar results. It is time for the Chancellor to sound the rallying call.