Chancellor Rishi Sunak is promising a £4.6bn package to help hundreds of thousands of jobless back to work as he prepares to unveil his Spending Review.
He said in an announcement ahead of Wednesday’s review that it would include £2.9bn for a new Restart jobs scheme and £1.4bn to expand the Jobcentre Plus agency.
Mr Sunak said his “number one priority is to protect jobs and livelihoods”.
The review will outline spending for such things as roads, police and NHS.
But it comes against a backdrop of an economy hit by the coronavirus pandemic and huge job losses.
Earlier this month,
official figures showed the UK’s unemployment rate rose to 4.8% in the three months to September, up from 4.5%. There was a big rise in the number of 16 to 24-year-olds out of work.
Earlier this month, the Bank of England forecast that the jobless rate could rise to nearly 8% by the middle of next year
Under the Restart scheme, people who have been out of work for more than 12 months will be provided with regular intensive support tailored to their circumstances.
Mr Sunak will also confirm in his Commons statement on Wednesday more funding for the next stage of his Plan for Jobs – including £1.6bn for the Kickstart work placement programme, which the Treasury says will create up to 250,000 state-subsidised jobs for young people.
The scheme, first launched in August, offering employers £2,000 for every new worker they take on, is to be extended to the end of March.
There will also be a £375m skills package, including £138m of new funding to deliver Prime Minister Boris Johnson’s Lifetime Skills Guarantee.
Mr Sunak said on Tuesday: “This Spending Review will ensure hundreds of thousands of jobs are supported and protected in the acute phase of this crisis and beyond with a multibillion package of investment to ensure that no-one is left without hope or opportunity.”
The package has won the support of business and industry. Matthew Fell, policy director at the CBI employers’ group, said the chancellor was right to focus on job creation.
“Covid-19 has swept away many job opportunities, for young people in particular,” he said. “The scarring effects of long-term unemployment are all too real, so the sooner more people can get back into work the better.”
Claire Walker, co-executive director, at the British Chambers of Commerce, said retraining and reskilling was vital to getting people back to work.
“Investment in Kickstart, in which Chambers are playing a leading role, and the launch of the Restart scheme, will be critical in helping support the recovery,” she said.
However, economist Nye Cominetti, from the Resolution Foundation, said the government must learn lessons from previous schemes which failed to meet expectations.
“The chancellor is right to put in place help for those out of work for long periods as they often struggle most in periods of high unemployment.
“The Restart Scheme is a big step up in terms of job support. The £2.9bn allocated for the coming three years exceeds that spent on the Work Programme over five years after the financial crisis.
“But for the new approach to be effective, ministers must learn lessons from the patchy record of that scheme, particularly the need for more intensive support for harder-to-help groups, who were too often side-lined.”