Behind the headlines: Kickstart scheme
It’s no surprise that the economy has taken a down turn over recent months, shrinking 20.4% compared to the first three months of this year. One of the hardest hit groups in the pandemic has been young people, as businesses have taken the difficult decision to consolidate their workforces and weather the storm, meaning that jobs have dried up in certain sectors.
To spur on the UK economy’s revival, the government launched the Kickstart Scheme earlier this month. Here’s what you need to know:
As announced by the Chancellor in July as part of his ‘Plan for Jobs’, The Kickstart Scheme is a £2 billion fund to create six-month work placements for young people. The government will fully fund each “Kickstart” job – paying 100% of the age-relevant National Minimum Wage (NMW), National Insurance and pension contributions for 25 hours a week.
Employers will receive an additional £1500 from the government for each 16-24 year old they train, with the aim to help young people build the skills and experience required for long-term work. The aim of this funding is to help employers with set up, support and training costs, including uniforms and necessary skills development etc. Employers are also able to top wages up from NMW should they wish and there is no cap on the number of places an employer can offer. The devil in the detail though is that a minimum of 30 roles must be offered by an employer which is a huge ask for any business, especially a small one. It’s possible to partner with other employers to reach the threshold, but will businesses be keen on that?
For now, the scheme is open to 16-24 year old applicants who are currently receiving Universal Credit.
Kickstart-funded jobs must be new ones; they must not replace existing or planned vacancies or cause existing employees or contractors to lose or reduce their employment. The roles offered must be:
- a minimum of 25 hours per week, for 6 months
- paid at least the National Minimum Wage for their age group
- should not require people to undertake extensive training before they begin the job placement
Applicants will be identified by jobcentre coaches as individuals at risk of long-term unemployment. They will be supported throughout the applicant process and after the placement.
The government aims to have the first placements available from November, with the scheme running until at least December 2021 across the whole UK.
On the whole, the scheme has been welcomed widely as the necessary economy boost its title so suggests. According to the BBC, ‘more than 700,000 more people are leaving education and entering the labour market at an extremely difficult time, and there are already more than 800,000 under-24-year-olds receiving Universal Credit, many of whom are out of work’. Prince’s Trust Director Michele Farmer has commented that they are therefore ‘reassured’ that the government recognised ‘the impact felt by young people at this time’. Mr Sunak has also gone one step further, hinting at extending the scheme should the launch prove successful: ‘if [Kickstart] works and people think it is doing a good job, I’m very happy to do more’.
The scheme also offers young people the option to get experience in an area they may be interested in, without the longer term commitment: a ‘try before you buy’ approach to entering the world of work. However, for this reason there is some scepticism. Without a longer term solution and by extending it out further, the initiative could result in wide-spread ‘job hopping’ as youngsters move between short fixed term contracts without longer term employment coming to fruition. Of course, that does sound quite cynical at first. The aim of the scheme is to offer training for long term skills development to build an individual’s CV, deem them more employable and to develop their confidence in a work environment. But, as the BBC reminds us, ‘they don’t always offer the level of training or experience participants hoped for, and firms are often accused of using them as a pool of cheap labour to replace older, more expensive employees’. It can also be ‘hard to calculate whether roles created for such schemes are “additional” jobs or simply subsidised places that would have been created anyway. Above all, it will only work as a stepping stone into permanent employment if those “proper” jobs are available’.
Tesco and National Rail are two of the household names to have initially thrown their hats into the ring, with Tesco alone offering 1,000 placements. But what about small businesses? Chair of the Federation of Small Businesses Mike Cherry, has indicated that ‘small firms, who are the largest employers across the business landscape, have long expressed interest in this scheme and will be disappointed to find it harder than expected to take part. To put it bluntly, this scheme has not been designed with small businesses front of mind.’
As a strong proponent of payroll apprenticeships and the levy to support apprenticeships generally, I must admit I am in full support of this initiative and the importance of developing young people’s skills for the future workplace. However, I am very disappointed in the 30 place minimum. Wherever your business stands on the issue, I hope you find the below sources and resources useful in sharing with your stakeholders. Of course we are yet to fully understand what the impact will be on agents and payroll teams (when are we ever the first thought?!) and in a year of such turbulence, I particularly hope the funding process is as straightforward as possible!
Sources and resources