MORE than £2bn is to be spent creating thousands of jobs for unemployed young people to help the country recover from coronavirus.

Rishi Sunak is expected to reveal the Kickstart scheme, described as the “biggest package of support for youth unemployment in decades” as part of his summer statement later today.

The Treasury hopes the Britain-wide ‘young jobs revolution’ scheme will create hundreds of thousands of jobs for people aged 16-24 who are currently on Universal Credit by paying employers to give young people a six month work placement.

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As of April this year, more than 60,000 young people in Scotland were claiming universal credit, with three quarters of them not employed.

Every job will be paid at 100% of the national minimum wage for 25 hours a week, with companies able to top up the wage at their discretion.

The aim is to give young people the chance to gain work experience and skills, so they are more easily able to find long-term work in the future.

The Chancellor said: “Young people bear the brunt of most economic crises, but they are at particular risk this time because they work in the sectors disproportionately hit by the pandemic.

“We also know that youth unemployment has a long-term impact on jobs and wages and we don’t want to see that happen to this generation.

“So we’ve got a bold plan to protect, support and create jobs – a Plan for Jobs.”

Mr Sunak is also expected to announce a £111 million investment to triple the scale of traineeships in 20-21, an extra £32m for the National Careers Service to provide jobs advice to a quarter of a million more young people, and £17 million of funding to almost triple the number of sector-based work academy placements today.

Kathleen Henehan, an economist at the Resolution Foundation, welcomed the scheme, and said: “Young people have been hit hardest by Britain’s growing jobs crisis, with three-in-ten 18-24 year olds furloughed, and one-in-ten already having lost their jobs. So, action to keep youth unemployment down is crucial to avoiding lasting damage to careers that are just getting started.

“It is very welcome that the Government has opted for a bold and ambitious scheme, with £2 billion potentially meaning jobs for around 350,000 young people. This is exactly the kind of approach needed, learning the lessons of what worked in the financial crisis.”

She added: “ It is crucial that these jobs are created quickly, with local authorities crucial in making that happen at anything like the scale the Government intends.

“350,000 new jobs would be three times as many as were created following the financial crisis, so delivery on this scale will be a huge challenge.”

Meanwhile, the Chancellor faced urgent calls to extend the furlough scheme and give greater fiscal powers to devolved administrations ahead of his summer statement.

Economists have warned that his pre-announced plans, including a freeze on stamp duty, will not help the country recover and suggest he may need to borrow up to £300bn.

Analysis by the National Institute of Economic and Social Research (NIESR) has found that if the furlough scheme is not extended beyond October, it could cause a permanent loss of £50bn in GDP - around £750 per person.

Garry Young, Deputy Director for Macroeconomics at NIESR said: "The justification for keeping fiscal support measures going is that it makes economic sense. Premature withdrawal of the measures could mean that the long-term adverse impact on the public finances ends up being worse than the cost of continued short-term support.

“Probably the most important policy measure the Chancellor could take would be to bring forward spending promised as part of the government’s levelling up agenda. In his March budget, the Chancellor announced plans for substantial additional public investment. It is difficult to think of a better time than now for the government to invest more.

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"This would increase demand in the UK economy and provide support when it is most needed.”

Anneliese Dodds, Labour's shadow chancellor accused the Mr Sunak of not going far enough with his jobs-boosting plans, and said the scheme had been inspired by Labour's Future Jobs Fund implemented following the 2008 financial crash.

Ms Dodds said: "Labour has repeatedly called on the government to match the ambitions of Labour's Future Jobs Fund, to rise to the youth unemployment challenge. To the extent that the 'Kickstart' programme is based on the Future Jobs Fund model, it should help many young people to access work.

“However, the Government are yet to rise to the scale of the unemployment crisis. The urgent priority right now is to prevent additional unnecessary unemployment in the first place by abandoning the Government's 'one-size-fits-all' approach to the removal of the Job Retention and Self-Employed schemes. In addition, older people who become unemployed, and those living in particularly hard-hit areas, will also need tailored support.

“Government also urgently needs to get test, track and isolate right, as ultimately the biggest drag on our economy has been the slow public health response, which threatens additional localised lockdowns and which has reduced consumer confidence.”