DWP has no idea whether ‘chaotic’ Kickstart scheme was worth the money, says Public Accounts Committee

Despite spending in excess of £1bn on the scheme, it reached far fewer people than intended, and the Department has little idea what was delivered

The DWP has no idea whether the 'chaotic' Kickstart scheme was worth the money, the Public Accounts Committee (PAC) has said.

Launched in September 2020 as part of the government's Plan for Jobs to help economic recovery in the wake of the Covid-19 pandemic, the scheme was designed to offer 16 to 24-year-olds on universal credit a six-month work placement for which the government would pay 100 per cent of the age-relevant National Minimum Wage, National Insurance and pension contributions for 25 hours for each young person placed with them, as well as help pay for uniforms and other set up costs.

However, in a new report published today, the PAC says that the scheme has failed to deliver for young people or the taxpayer. For example, with the DWP forecasting that Kickstart will support far fewer young people than envisaged - 168,000 against the original prediction of 250,000 - and will cost £1.26 billion, the PAC says that, despite more favourable than predicted economic conditions, many young people who joined universal credit at the start of the pandemic have remained on the benefit, and the DWP doesn’t know why they have not moved into Kickstart jobs.

In addition, amongst other failures, the PAC highlights that -

• early delivery was chaotic, with the Department neglecting to put in place basic management information that would be expected for a multi-billion-pound grant programme, and displaying a 'disappointing lack of curiosity' about how the scheme was actually working;
• the Department's adoption of an ‘agile approach’, launching Kickstart as a ‘minimum viable product’ and seeking to refine its details in operation, created problems engaging with employers and managing the scheme, because the rules were not clear;
• many employers were frustrated at how long it took to fill their Kickstart vacancies, with many waiting months for vacancies to be filled, with no guarantee they ever would be;
• the lack of structured monitoring of how work coaches were helping people towards work means the Department cannot know if it provided a consistently high-quality service to all claimants;
• the Department has not monitored and does not know whether it put the right people onto Kickstart, and has completed only occasional, ad hoc analysis of Kickstart participants’ characteristics, such as their ethnicity or educational attainment to try to understand how the scheme was targeted;
• the DWP doesn't know what employers provided with the £1,500 employability support grants they got for each young person they took on through the scheme;
• it is hard to see how the Department has used Kickstart in concert with its other employment schemes and therefore whether it is getting maximum value for the taxpayer without duplicating spend; and
• the Department has failed to set out clearly enough the measures of success, and does not expect its evaluation to robustly capture Kickstart’s impact on the wider economy, and so it will not know whether its assertion that the scheme created genuinely new economic activity is correct.

PAC Chair Dame Meg Hillier said today -

'There are very unfortunate similarities across government’s Covid response schemes: rushed implementation and too little track kept of whether a scheme was delivering what it promises – even given the unprecedented pressures at the start of the pandemic. In this case the department simply has no idea whether this scheme was worth the money, not least because it has little idea what was delivered for it.

DWP set up a scheme with good intentions but with no proper way of measuring its success for young people seeking work. It enabled employers to spend money for placements with no method of recovery if the job did not last. Employers were frustrated by how hard it was to find suitable candidates for the jobs they created - and ultimately the scheme reached far fewer people than predicted.'

For more information, see 'Chaotic' £1.9bn Kickstart scheme for youth employment fails to deliver for young people or taxpayer from parliament.uk

Update (27 April 2022) - in the government's response to the Committee's report - published at pages 19-25 of Treasury Minutes: 26 April 2022 - it accepts the Committee's conclusion that the rapid development of the Kickstart scheme was achieved at the expense of clear guidance and basic management information and agrees to review how it can maintain the administrative processes, guidance and management information that are now in place for use in any successor scheme that may be needed in future recessions.