As part of the UK’s economic recovery from the Coronavirus pandemic, Chancellor Rishi Sunak has announced the opening of a new Kickstart Scheme which is due to launch fully later in the month. The scheme was announced in early July as part of the Chancellors Plan for Jobs, which is set to be the biggest support package for youth unemployment for decades. The scheme means the Government will either fund or contribute towards the creation of new roles in businesses for 16-24-year olds who would otherwise find themselves entering the employment market at a precarious time.
What is the Kickstart Scheme?
The Kickstart Scheme is a £2bn fund that is going to be launched by the conservative government to create job opportunities and pay for six-month work placements for 16-24-year olds who are currently claiming Universal Credit. The scheme will be aimed towards those in the age group who are just leaving school and have little experience so may find it difficult to get a job, or may have had job offers withdrawn due to the current situation. The occupants of the scheme are deemed to be at risk of long-term unemployment. The funding which is available for the scheme will see each work placement that is given out under the program receive 100% of the relevant National Minimum Wage for 25 hour weeks, plus the associated employer National Insurance contributions and employer minimum automatic enrolment contributions.
Sunak announced the Kickstart Scheme in the House of Commons and revealed: “These will be new jobs, with the funding conditional providing the jobs are additional. These will be decent jobs, with a minimum of 25 working hours per week paid for at the rate of at least the National Minimum wage.”
The Kickstart Scheme also states that employers who take part will need to provide training and support for people to find a permanent job, with the Chancellor stating: “If employers meet all of those conditions, we will pay young peoples wages for 6 months, plus an amount to cover any overheads.”
Who can apply for the Kickstart Scheme?
All employers can apply for the Kickstart Scheme to take on a young person for a 6-month work placement. Upon announcement of the Scheme in July 2020, we were not given any criteria which would exclude certain businesses from the scheme. In the Chancellors speech, he declared: “I urge every employer, big or small, national or local, to hire as many Kickstarter applicants as possible
Up to this point, we have not received a lot of information about the criteria for which 16-24-year olds are eligible for the Kickstart Scheme, but we do know that the Chancellor stated that the Scheme was for young people in this age group who are currently claiming Universal Credit and at risk of ‘long term unemployment’. It is not yet clear whether this means that all 16-24-year olds who are claiming Universal Credits are eligible or whether more information and criteria will be released.
How does it work?
The Kickstart Scheme aims to encourage employers to create quality jobs for younger people aged 16-24. The scheme will run for 6 months and will cover the complete minimum wage of workers for 25 hours a week. The employer can choose to pay more on top of this or offer longer hours if they wish. As the Kickstart Scheme is for people aged 16-24, the actual amount an employer receives varies depending on the age of the candidate they employ. The National Minimum Wage is as follows:
- £4.55 for those under 18 years of age
- £6.45 for 18-20-year olds
- £8.20 for 21-24-year-old
The scheme also provides employers with an additional £1,500 for each job placement to cover the cost of setup, or to enable employers to provide extra training and support during the placement.
The Kickstart Scheme is open to any employers from any industry. The placements offered must be new job roles created especially for the scheme, and not take work away from existing employees or contractors. It is important to remember that the scheme is aimed at helping young people become more employable so your application will need to show how the job roles you are offering will support this aim.
Employers only receive funding if they recruit someone through the scheme. You can advertise that you are supporting the scheme, but shouldn’t take applications directly. Employers must supply a job description for each placement once their funding application has been successful. The scheme then matches suitable applicants to the role from a pool of participants and invites them to contact the employer.
Can employers’ interview Kickstarters?
Yes, once you have made a successful application you can choose who you want to apply from the applications for your job roles. It appears employers can implement their usually hiring criteria and process so long as the applications are all part of the scheme.
How do employers apply for the Kickstart Scheme?
There are a few different ways that employers can apply for the Kickstart Scheme. For micro-businesses, it is essential to form some sort of partnership or collective with other similar employers and apply together. The Government has stated, “If your organisation is creating more than 30 job placements as part of the Kickstart Scheme, you can submit your application directly.”
The Government went on to say, “If your organisation is creating fewer than 30 job placements as part of the Kickstart Scheme, then you cannot apply directly and must partner with other organisations in order to create a minimum of 30 job placements before applying.”
During the statement, the Government went on to confirm that the other organisations can include charities, local authorities, other employers, and trade bodies. So, for the smallest businesses in the country, that sort of partnership will be essential.
Employers can apply for the Kickstart Scheme online now as the opening for the Scheme was the 2nd of September. When the Kickstart Scheme was opened, the government released some more information about the criteria and have stated that there is no cap on the number of placements that are available as part of this scheme, although it is clear that only employers who are making 30 or more placements available are able to apply for the scheme.
The original recommendation of the government is to contact your local DWP partnership team. The details are here.
Who does the government pay?
The government will pay the employer directly to the tune of minimum wage, Pension Contributions, and National Insurance Contributions for 25 hours per week. But it is important to keep in mind that those partaking in the Kickstart Scheme will be aged from 16-24, meaning that the minimum wage can vary.
The Kickstart grant is paid to employers in arrears. The Department for Work and Pensions will check the PAYE information you provide to HMRC every time you pay your placement and use it to reimburse you. Once you have given confirmation that the placement has started and been set up on your payroll and through PAYE, you will be paid for any initial costs.
What do employers offer?
There is no formal documentation on what an employer offers within the Government guidance. But placements of this nature are not intended to be just free labour of course.
As an employer, you should be offering employee training, real work experiences, and helping them to build their professional skills. Government guidance also suggests that employers should offer ‘employability support’, but different businesses are likely to interpret this in different ways.
There is no requirement for employers to employ the Kickstarters after the 6 months, however, you can offer permanent roles should you wish to do so, but the funding is only available for the 6-month placement. The main goal of these placements is to give young people the skills to make them more employable in the long-term.
Positives of the Kickstart Scheme
As this Scheme is aimed to help young people gain employment, while also offering businesses opportunities to take on new and exiting staff members who can add flair and passion to their company, there is going to be a lot of positives. Some of which are:
- Providing workers and employers with transferable skills
- Creates potentially 350,000 jobs for young people between the age of 16-24
- Allows young people who have lacked employment to learn on the job skills and traits
- Creates opportunities for businesses as it creates a new generation of employees
- Businesses of all sizes can team up to sign up for the Kickstart Scheme
- The Kickstart Scheme will initially be open until December 2021 but does have the option of being extended
- The Kickstart Scheme will help smaller businesses which could potentially lead to them growing and expanding into larger businesses
Negatives of the Kickstart Scheme
Of course, there may be a few negatives that you should consider and weigh up carefully before deciding if this is the right choice for your business. These include:
- Given the participants of the scheme are all young and likely new to the workforce, they are not likely to have much work experience so employers will have to dedicate time to training, mentoring, and supporting them
- Not all participants will receive a full-time job after the placement
- The scheme is only open for people under the age of 25 who are out of work, so anyone older does not benefit
- The Scheme could potentially push others out of work
- The Scheme may not help participants further down the line
How can Maple Accountancy help?
Are you unsure about applying for the Government Kickstart Scheme? Or maybe you are not too sure if you are eligible or need to find other businesses to apply with? If you have any questions about the Kickstart Scheme, or any other help available for businesses to help deal with the impact of the coronavirus pandemic, Maple Accountancy can help. Contact us today at firstname.lastname@example.org or 01322 207336 to speak to one of our expert business advisors.