Research and analysis

Executive summary: Kickstart Scheme: A Quantitative Impact Assessment

Published 7 October 2024

Background

This report presents an impact assessment and accompanying cost-benefit analysis of the Kickstart scheme, which ran from September 2020 to March 2022.

Kickstart was aimed at 16 to 24 year olds on Universal Credit (UC) at risk of long-term unemployment. Kickstart was launched during the first COVID-19 lockdown. Kickstart was designed to mitigate the long-term effects of unemployment by providing 25 hours a week of subsidised employment for six months. Public and private sector employers were invited to participate in Kickstart by providing specific roles within organisations open for Kickstart participants. In total, Kickstart provided 163,000 placements throughout its lifespan.

Methodology

The impact assessment looks at labour market outcomes for individuals who participated in Kickstart from March 2021 to January 2022. Outcomes are tracked up to two years to measure whether somebody was in work or claiming UC at that point. Outcomes from this group are compared to individuals who were eligible for Kickstart but did not start a placement. This average treatment effect approach allows us to measure the labour market impact of Kickstart directly.

Individuals in the two groups are matched together to account for differences in characteristics between the two groups to ensure a fair comparison. This technique accounts for some self-selection bias introduced by the voluntary nature of Kickstart. The methodology is well established and is considered a plausible means of estimating the impact of interventions of this type.

Labour market outcomes are extrapolated forwards to five years to look at the long run impacts of the scheme. These results are then used to produce a cost benefit analysis. This focusses on different perspectives where different groups value the costs and benefits of Kickstart differently, including a society perspective that combines all perspectives together. This analysis follows the DWP Social Cost-Benefit Analysis Framework (Fujiwara 2010)^{[footnote 1]}: methodology, in line with the methodology used in other departmental impact assessments.

Key Findings

• this report provides evidence that taking part in Kickstart reduces the time 19 to 24 year old UC claimants spend on benefit and increases the time they spend in employment
• we estimate that for every 100 people who participated in Kickstart, an additional 11 of those are in unsubsidised employment at two years compared to a similar group of people who did not participate in Kickstart
• we also estimate that an additional three people are not on UC at the two year point compared to a similar group of non-participants
• this impact is consistent from eight months after the intervention start and persists up to two years. There is no evidence to suggest that this impact diminishes beyond this point
• Kickstart has a positive impact on all subgroups examined in this report. Moreso, Kickstart appears to have a greater impact for those who have less success in the wider labour market, creating a levelling up effect
• for the Exchequer, Kickstart makes a return of £0.27 for every pound spent at two years, and £0.49 at five years. This is due to the high unit cost of Kickstart, and the relatively narrow scope of benefits included in this perspective
• Kickstart makes a return of £1.18 for every pound spent when combining all perspectives at two years. At five years Kickstart makes a return of £3.15 for every pound spent

1. Fujiwara D. ‘The DWP Social Cost-Benefit Analysis framework (WP86)’ Department for Work and Pensions working paper 86, 2010. ↩