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Kickstart scheme moves down market

Responding to concerns that the government’s Kickstart scheme excluded small employers, more than 500 organisations have signed up to act as gateways to help them take on unemployed people looking for work.

30th Sep 2020
Freelance Journalist
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500 organisations sign up as Kickstart gateways for smaller employers

Under the scheme first announced by Chancellor Rishi Sunak in July, the government will pay the wages, national insurance and pension contributions for people aged between 16 and 24 that businesses take on for six-months work placements. Each trainee will work 25 hours per week for which they will receive the national minimum wage, plus any extra the employer chooses to add on top.

Employers will also be eligible for an extra £1,500 from the government to help them set up the operation and train their Kickstart workers.

Gateways open

Doubts were raised once detailed guidance arrived in early September explaining that employers had to create at least 30 Kickstart jobs to apply for the scheme, indicating that it was designed with large corporations in mind.

Smaller employers wanting to create a few positions have to club together with joint applications to reach the threshold of 30 vacancies, or find a “gateway” organisation such as their local council, independent training organisations or colleges that will submit applications for them.

Jonathan Reynolds, Labour’s shadow work and pensions secretary, raised the issue in Parliament earlier this month, demanding: “What feedback has the government received already… for small businesses to participate in the scheme given the minimum number of jobs that can be created from a bid is 30?”

The surge in organisations such as the Federation of Small Businesses (FSB) coming forward to act as gateways bodes well for the Kickstart scheme and could plug some of the employment gaps that will appear among smaller businesses when the furlough scheme comes to an end on 31 October.

Key tests for success

Other unanswered questions and worries persist too. Reynolds spelled out two “key tests” for the Kickstarter scheme alongside better access for small businesses. Labour would be satisfied by the scheme “If the jobs it provides are real, quality jobs” and “if it provides opportunities for long-term employment beyond the initial subsidised placement”, he said.

How government can meet these two demands is unclear – especially as analysts speculate that companies may exploit the criteria by cycling through participants every six months without offering them long-term positions.

Ensuring the Kickstarter roles go to those who need them most is another challenge. According to work and pensions secretary Therese Coffey, more than a million youngsters will qualify for the scheme that was initially designed to fund “well over 200,000 jobs”.

Updated  guidance

The government responded to concerns about predatory employers replacing old workers with new ones with a list of evidence businesses will have to supply before they receive funding.

The guidance also confirmed that Kickstart scheme participants will still be able to claim Universal Credit while on placements - an important clarification given that it only pays for 25 hours of work a week.

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