This week, the Government finally delivered the details of the Kickstart Scheme after Chancellor Rishi Sunak promised to provide more information in August.
Back in July in his mini-budget speech he said he’d launch a Kickstart Scheme to get young people on Universal Credit, who have lost jobs and opportunities because of coronavirus, back to work.
With the unveiling of Kickstart this week we finally have more details about how employers – large and small – can apply to be part of it, and some SMEs are disappointed with the result.
A few have even labeled it ‘complicated’ and a ‘let down’ for young people, mainly because those in similar industries have to club together in order to register for the scheme, as we explain below.
Dubbed ‘Kickstart’, the youth employment scheme is aimed at creating hundreds of thousands of jobs for the ‘left-behind’ under-25s. Pictured: Chancellor Rishi Sunak
More information has also been provided on how qualifying 16-24 year olds can apply for these roles.
Here’s the 10 key questions and answers to get you up to speed on Kickstart and how it works…
1. What is the Kickstart Scheme?
The Government describes the scheme as an ‘innovative way to help young people into work and spur Britain’s economic revival’. It was officially launched on Wednesday.
The scheme is subsidised with the Government paying 100 per cent of the age-relevant National Minimum Wage, National Insurance and pension contributions provided young people aged 16-24 are given quality positions with a minimum 25 hours a week.
2. Why was there a delay in the launch and where do we find out more?
This is not clear. The Chancellor had said in July that we’d find out more about the scheme in August. But information was only unveiled this week.
Businesses are now able to sign up to be part of the £2billion Kickstart and get more guidance here.
Young people wanting to take part can find out more here.
3. Can employers pay more if they want to?
Employers will be able to top up this wage if they want to, but this will be from their own funds.
If, however, they need more funding for support, training, uniforms, setup costs and equipment the Government will also pay employers £1,500 to per Kickstart placement.
4. Why is the Government focusing so much on the unemployed youth?
The Government points out that young people are more likely to have been furloughed, with many working in sectors disproportionately hit by the pandemic.
Government figures now show that a record 538,000 under-25s claimed UC in lockdown.
The Kickstart jobs are designed to build their skills in the workplace and are meant to help them gain experience to improve their chances of finding long-term work.
Chancellor Rishi Sunak said: ‘This isn’t just about kickstarting our country’s economy – it is an opportunity to kickstart the careers of thousands of young people who could otherwise be left behind as a result of the pandemic.
‘The scheme will open the door to a brighter future for a new generation and ensure the UK bounces back stronger as a country.’
5. I’ve heard the likes of Tesco have pledged to offer Kickstart jobs – how can my small business compete?
It’s true – Tesco are taking part but the Government assures that businesses of all sizes looking to create quality jobs for young people can apply.
Business recruiting more than 30 people can submit a bid directly online through the main Kickstart page.
However, there’s an extra hurdle that SMEs have to overcome. If SMEs hire fewer than under 30 people they have to pool together with other SMEs to create a batch of 30 roles.
Jonathan Reynolds, Shadow Secretary of the DWP, claims Kickstart is letting young people down
Effectively, small businesses have to engage in a type of ‘Tinder for SME’ exercise before they can apply to be part of the Kickstart Scheme.
A spokesperson for the DWP said: ‘They [small businesses] can still apply for funding but must partner with other employers or organisations in order to create a minimum of 30 jobs before applying.
‘This can include similar employers, local authorities, trade bodies, Chambers of Commerce and charities. If you need help finding a representative or other employers to bid with, speak to your local Jobcentre.
‘We have bespoke support in place through our team of Employer Partnership Managers who work from our jobcentres.
‘They will help link employers with fewer vacancies up with others or with a representative body.’
However, this has left several SMEs disappointed with the way in which they have to apply to be part of this scheme.
Some already claim the process is skewed in the favour of larger corporates who have a simpler application process (see SME reaction to the Kickstart scheme).
But the DWP claim it’s not a competitive process. It said: ‘This is about making the process as efficient as possible so we can quickly get young people into placements – assessing a separate bid for every single vacancy would slow us down.’
SME reaction: Kickstart is too ‘complicated’
Mohammed Wasi of Unlocking Language says his company have set up a consortium to apply
Tatjana Apukhtina runs a small tea subscription company, Teapro. She said: ‘We are a bit annoyed by the “pack of 30 or nothing” scheme.
‘Although it does say that small businesses can join forces, the scheme is clearly designed to benefit the large corporations.’
Mohammed Wasi operations director of speech and language therapy services business Unlocking Language will be hiring six Kickstarters.
He said: ‘We are a small business who would love to utilise the Kickstarter scheme but due to the eligibility criteria of a minimum 30 placements would not be able to do it directly.
‘We have however set up a group consortium of small businesses and have approximately 22 placements confirmed and hope to finalise the 8 others shortly.’
He added: ‘The businesses need to be in similar industries. The companies we have formed a consortium with are all in healthcare.
‘We got no direct advice from the DWP – we’ve just reached out to contacts. On their website the DWP has encouraged small businesses to form together if they can’t do it on their own.’
Alex Stewart founder of OneNine5, which designs eco-conscious travel goods, said: ‘We had a full role and job spec lined up but it isn’t viable for small business because they want a minimum of 30 hires.
‘It’s only viable if you can group up with other small businesses. It feels like the Government have been purposefully vague with the scheme when it comes to “representing” businesses who aren’t hiring 30 people.’
Clare Willetts, CEO & founder of kids online retailer Not only pink and blue feels Kickstart seems complicated
Clare Willetts, chief executive and founder of kids online retailer Not Only Pink and Blue said: ‘Many of us small businesses have been waiting for the details of this scheme (especially after not qualifying for any other help during lock-down) now it seems that this is going to be pretty complicated for us to apply for as well.
‘Looking into it further there seems to be a lack of information of how you can ‘group’ together as a set of small businesses and the level of information required for each of you.
‘To have one business in the group managing the application is a real headache.’
6. Why can’t businesses advertise the roles and find their own ideal candidates?
This was not initially made clear so many companies started advertising Kickstart roles on online platforms like LinkedIn and Totaljobs.
But last month DWP warned companies not to advertise the roles, after This is Money brought the listings to light.
The DWP said: ‘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.’
Companies will still have to supply a job description. The DWP said: ‘Once the application is approved, we will need detailed job descriptions to ensure we are identifying the right young people for the job.’
7. How long will Kickstart go on for?
It will be delivered by the DWP and will initially be open until December 2021, with the option of being extended.
8. How much will the government spend on admin costs?
The DWP said: ‘We will provide funding to representative bodies of £300 for each person starting a Kickstart job to cover the administrative costs.’
9. Is there a limit on the number of Kickstart jobs?
No. Secretary of State for Work and Pensions, Therese Coffey, said: ‘As we launch our £2billion Kickstart programme, putting young people at the heart of our revival – we are urging businesses to get involved in this innovative scheme and take advantage of the enormous pool of potential out there.
‘There is no limit on the number of opportunities we’ll open up through Kickstart and we’ll fund each one for six months as part of Our Plan for Jobs to create, support and protect jobs.
10. Has the Government ever introduced something like this before?
The Labour Party government introduced a similar scheme more than a decade ago.
Its Future Jobs Fund was introduced in October 2009 to support the creation of subsidised jobs for unemployed young people. It was aimed at 18-24 year olds in receipt of Job Seeker’s Allowance.
It was managed by the DWP in partnership with the Department for Communities and Local Government.
Jonathan Reynolds, Shadow Secretary of the DWP, has slammed the government’s handling of Kickstart and claimed it is letting down young people.
– Aimed at youth aged 16-24 on Universal Credit
– Announced in July 2020 – launched in September 2020
– Jobs to be created: Approximately 350,000
– Cost: £2billion
Future Jobs Fund
– Aimed at youth aged 18-24 in receipt of Job Seeker’s Allowance
– Introduced in October 2009 – axed May 2010
– Jobs created: 105,000
– Cost: £680million
Reynolds, the Labour MP for Stalybridge and Hyde, told This is Money: ‘Britain is in the midst of a jobs crisis and the Government must do all it can to safeguard livelihoods and protect jobs.
Commenting on Kickstart’s delayed announcement, he said: ‘Once again, this Government’s bluster has let young people down. The reality on the ground is yet more confusion for jobseekers and employers.’
Reynolds added: ‘When the Kickstart Scheme was announced, Labour argued that it didn’t meet the scale or scope of the unemployment challenge in the way that Labour’s successful Future Jobs Fund did.
‘Kickstart will only work if employers and jobseekers have clarity and confidence that the scheme will lead to meaningful work.’
However, while Reynolds labels it as ‘successful,’ the jury is out.
Statistics published on Gov.uk by the DWP under a document entitled ‘Impacts and Costs and Benefits of the Future Jobs Fund’ show that just over 105,000 jobs were created under the FJF, which cost the government around £680million.
It was scrapped by the coalition Government in May 2010 as part of saving measures to address the UK deficit.
It was widely reported that David Cameron dismissed the FJF as ‘expensive, badly targeted and did not work’.
Is the Kickstart Scheme the answer to youth unemployment?
Paula Gardner: Thinks the premise is good but worries it might miss the mark
Paula Gardner, business psychologist and founder of The Redundancy Recovery Hub says: ‘I think the premise behind it is good, but the worry is that the same thing will happen as did with the Jobs Retention Fund with employers using it as a form of unpaid labour, and people moving back into unemployment at the end.’
She added: ‘I would prefer to see something like the more structured apprenticeships schemes prioritised.
‘We have interviewed both employers who use apprentices, and apprentice providers, on The Redundancy Recovery Hub and it’s a scheme where people are taught a profession, study for exams or do additional coursework, and get a qualification at the end of it.
‘I myself work with the PRCA mentoring PR apprentices and I’ve seen it in action. Every apprentice gets a mentor who checks on both their coursework and that they are being treated fairly and not exploited.
‘Employers are also invested in the apprentice’s future as they have to make sure the apprentice gets a wide range of experience – this is part of the deal.
‘If the new scheme funded apprenticeships or something more structured, with a qualification or certification, it could be really game-changing.’