What is the Kickstart Scheme and Should Small Businesses Apply?

2020 has been difficult for most on new job prospects and career soaring achievements. Young people have been hit especially hard, with unemployment rate for 16-24 year olds at 12.7% in April-June 2020 compared to 11.6% at the same time last year.* As part of the coronavirus economic recovery plan, the Government has proactively introduced a new Kickstart Scheme in Great Britain aimed at people aged 16 to 24 who are at risk of being “left behind” in a labour market hard hit by the CoVID-19 pandemic. 

 

What is the kickstart scheme?

A £2 billion fund will be used to subsidise six-month high-quality work placements for Universal Credit claimants in the age group who are out of work and facing long-term unemployment. 

Funding available for each job will cover 100% of the relevant National Minimum Wage for 25 hours a week, plus the associated employer National Insurance contributions and employer minimum automatic enrolment pension contributions.

In short, the fund is aimed to try and prevent young people in a difficult job market from becoming reliant on Universal Credit over the long term. Employers benefit from additional resources, while young people are able to gain valuable experience and training – sounds like a win-win situation!

 

How the scheme works

Employers are able to receive funding after a successful application process. The job placements should support the participants to develop the skills and experience they need to find work after completing the scheme. Employers aren’t required to employ Kickstart employees (‘Kickstarters’) after the 6-months, though they’re more than welcomed to offer them permanent employment should they wish. 

A minimum of 30 job placements must be submitted per application. The Government will pay employers directly as per the wage guidelines, which will vary depending on age. Employers also receive £1,500 per job placement available for setup costs, support and training.

From the information provided thus far, successful applicants will only obtain funding if they hire someone referred to them by the Government. That is, employers aren’t able to go handpicking their own Universal Credit recipients. However, the usual hiring criteria and vetting process can be implemented still as long as the panel of applicants are chosen from the referrals from the scheme.

 

Who can apply?

The great news is that any organisation, regardless of size, can apply for funding. There are a few requirements of the job placements:

  • They must be new jobs
  • The roles must be a minimum of 25 hours per week, for 6 months
  • The roles must be paid at least the National Minimum Wage for their age group
  • They must not replace existing or planned vacancies
  • They must not cause existing employees or contractors to lose or reduce their employment
  • They should not require people to undertake extensive training before their begin the job placement
  • The roles should help Kickstarters develop their develop skills and experience

 

How do employers apply for the Kickstart Scheme? 

  1. Businesses that are applying for more than 30 job placements can apply directly online here. You will need to provide the following:
    – the Companies House reference number or Charity Commission number
    – the organisation address and contact details
    – details of the job placements and their location
    – supporting information to show that the job placements are new jobs and meet the Kickstart Scheme criteria
    – information about the support the organisation can give to develop employability skills of young people
  2. Micro or small businesses that have less than 30 job placements available as a single applicant are able to form a collective with other organisations and apply together. A representative will apply for the grant on behalf of the group of employers. There are a few requirements before one can act as a representative of the group, and an extra £300 can be granted to support the associated administrative costs of bringing together these employers.

The Chamber of Commerce Herefordshire and Worcestershire are helping collate businesses who have less than 30 job placements available. If your local business is part of this Chamber then refer to their website for more information. We predict that other local Chambers will also begin to act as representatives for businesses in this manner also, and will update with more information when it becomes available.

 

Should micro or small businesses apply?

Chancellor Rishi Sunak encourages ‘every employer, big or small, national or local, to hire as many Kickstarters as possible.’ 

There are, of course, pros and cons to consider. The Kickstarter candidates applying are likely not to have much work experience, given they are probably just finished school, college or university. Employers will need to consider just how much time and resource will need to be put into mentoring, training and supporting these individuals, and have a sense of responsibility for their development to find jobs in the future.

On the other hand, this is a great initiative set out by the Government and if you’re looking for extra hands to help with your business then you could be introduced to some new keen and enthusiastic talent. 

So consider carefully if this is something that is right for your business and have a clear idea on what skills you can equip these young people with to prepare them for successful careers. 

 

Note: Please use this article as a guideline and always refer to the official government website for more information by visiting the Department of Work and Pensions. 

Note: The information provided is updated as of September 2020

 

*House of Commons: Youth Unemployment Statistics dated 11th August 2020