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The Kickstart scheme: how does it work?

The Kickstart Scheme opened for employer applications on 2 September 2020, and provides funding for businesses that take on young people who may be at risk of long-term unemployment. But what is the scheme exactly? What are the rules? And what are some of the issues employers are already facing with applying?

What is the Kickstart Scheme?

The Kickstart Scheme is part of the government’s economic recovery program following the coronavirus pandemic. It’s a £2billion fund aimed at creating 6-month work placements for those aged 16 to 24 who are on Universal Credit and are at risk of becoming long term unemployed.

The Department for Work and Pensions is running the scheme and say that 'Young people will be referred into the new roles through their Jobcentre Plus work coach, with the first Kickstarts expected to begin at the start of November.'

The scheme will initially run until December 2021 but may be extended beyond that, at the government’s discretion.

What do employers receive under the kickstart scheme?

Employers who apply for the Kickstart Scheme will receive 100% of the value of the National Minimum Wage, National Insurance Contributions, and minimum Pension Contributions for auto enrolment, for 25 hours per week for each specific individual applied for under the scheme. (National minimum wage will vary according to the age of the person on the placement).

Employers can top this wage up if they wish but will have to fund this themselves. The government will offer further funding for support, training, uniforms, setup costs and equipment if required up to a maximum of £1,500 per Kickstart placement.  

What are some of the difficulties faced by employers under the Kickstart Scheme?

The above all sounds positive, but there are a few pitfalls which have been identified even at this early stage.

Minimum number of placements

Many small and medium employers have found the minimum number of 30 placements, problematic. Unless an application is being made for 30 or more individuals, the Kickstart application cannot be made directly with the government. Instead, your business must try and partner with other organisations to create a minimum of 30 job placements, before applying. This can be difficult in terms of the time taken to find other businesses to partner with, but also in terms of who oversees the application and act as the representative to apply.

Role responsibilities and training resources

There is no clear guidance from the government as to exactly what the business should do with individuals placed under the scheme. There is reference to supporting candidates to look for long-term work, support with CV and interview preparation, training to develop their skills, such as team work, organisation and communication as part of the role, but no particular goals which should be met or experience which should be provided.

This could in some cases make it difficult for some smaller employers to know what to give the individuals on the scheme to do, particularly because the individuals who qualify for the scheme may not have much work experience or many skills. These skills will have to be learnt and so a great deal of training and mentoring will be required, and some smaller businesses may not have the time and resources to dedicate to this, particularly in the current economic climate.

End of placement

There is no guidance about how a business can terminate an individual under this scheme or what happens at the end of the 6-month scheme. There is no obligation to take on somebody after the 6 months ends, but it may be a difficult conversation to have with a young person that has worked hard for a company for 6 months, that they will not be rewarded with a job at the end of the 6 month scheme.

There are larger employers such as Tesco taking part in the scheme, which will make it difficult for smaller employers to compete. Not only do smaller employers have a more complex application process if they have fewer than 30 placements, but also may find it difficult to attract the best candidates when going head to head with well-known brands.

Applying to the Kickstart scheme as a group

Although the intention behind the Kickstart scheme is to give young people more opportunities to get into the workplace, and give businesses a much-needed financial boost, the bureaucracy that comes along with it may mean that small businesses are unable to offer their support. It also leaves them unable to compete with larger businesses who have the capacity to undertake the application process.

Some small businesses, however, are working with their local chamber of commerce, local authority, or other local business groups to come together and benefit from the government’s scheme. The government has released some guidance on how to become a representative for a group of businesses applying for the scheme, and what information you will need to gather in order to apply. If you do not yet have a group representative, you can also get in touch with your local Kickstart representative at DWP so that they can potentially put you in touch with the group representative for that area.

For further information in relation to the pandemic and seeking support for your business, visit our hub of resources, containing advice on the Future Fund, commercial leases, contracts, and more.

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