Employer applications for the Kickstart Scheme have now opened, as of the 2nd September (LinkedIn).
This £2 billion scheme is aimed at young people who could otherwise be left behind in terms of long-term employment opportunities due to the pandemic. Although, there is debate over who the scheme benefits. Many argue that the scheme does not go far enough to help young people and that it will end up benefiting big UK businesses through free labour.
Kickstart Scheme Details
Eligible young people between ages 16-24 will benefit from fully subsidised 6-month work placements, aiming to help Britain “bounce back from the Coronavirus”. This scheme will be run through Jobcentre Plus.
Every “Kickstart” job will cover a full 25 hours per week at the National Minimum Wage. These payments can then be topped up by employers if they choose, but they are under no obligation to do so.
The scheme will cost the government on average £6,500 for each job and the initial £2 billion of funding could be increased.
Employers will also receive £1,000 per employee under 25 for training funding, and £1,500 for every employee over the age of 25 they hire. The scheme is in addition to funding already provided to apprentices and those under 25 with health, care, and education plans. (Employee Benefits)
Current National Minimum Wage
Will the Kickstart Scheme #getbritainworking?
The Kickstart Scheme is part of related emergency measure packages aimed at tackling the UK employment crisis.
Young people are twice as likely to have been furloughed during the pandemic. Between March and May 2020, the number of under 24’s claiming Universal Credit rose from 250,000 to 500,000 (BBC).
Young people need support to find long-term sustainable work. They are entering one of the toughest jobs markets the UK has seen in decades. It is vital that the appropriate support and training are delivered and quickly.
The government has advised 16-24 year olds who are out of work to ask their local Jobcentre Plus to get advice on the scheme and moving into work. Other advice includes searching for vacancies including social media such as Twitter, using the hashtag #getbritainworking (GOV.UK).
Kickstart Scheme Application and Eligibility
Employer applications for the Kickstart Scheme are now available through the GOV.UK website.
Employers can only apply to take on 30 plus hires at once, or they must partner with other organisations to reach the minimum number and elect a representative to apply on their behalf. If you are a representative there is a further £300 of funding to help with administrative costs (GOV.UK).
The only criteria for the Kickstarts currently are that they need to be aged 16-24 and “at risk of long-term unemployment”. It is not yet clear whether everyone in the age bracket who claims Universal Credit will be eligible and what other qualifying criteria may be.
The Chancellor has called on as many businesses as possible, big and small to hire as many Kickstarts as they can. Of course, this will only apply if they can hire at least 30 people at once.
Employers will have no obligation to employ their Kickstarts after the initial six months, but these placements are intended to help young people build professional long-term skills and should not be used as free labour. There is a moral duty on employers to ensure that they are giving appropriate training and make it worth a young person’s time to take part (Microbizmag).
Labour’s Future Jobs Fund (FJF)
The Kickstart Scheme is being compared to Labour’s 2009 Future Jobs Fund (FJF) (Telegraph).
This was introduced after the 2008 financial crisis and cost around £330 million in comparison with this scheme for £2 billion.
The DWP had reported the net monetary value of the FJF was £4,000 per employee and £6,850 per employer (Brighter Box).
Arguably the scheme should build on previous success, although many say the scale of support is still nowhere near good enough for young people who are at risk of long-term unemployment.
Opinions on the Kickstart Scheme
Opinions on the Kickstart Scheme vary. Whilst most agree that it is vital the government provides appropriate support to the younger generation, there is debate about whether this scheme goes far enough to prevent long-term unemployment.
The scheme forecasts that it could help around 350,000 16-24 year olds in the UK, who are the age group most likely to have been affected by furlough (The Sun).
It is important to remember that young people often occupy jobs such as hospitality, leisure, travel, and retail. All of these areas have been affected by the pandemic and now around 10% of 18-24 year olds are currently unemployed (Brighter Box).
Anneliese Dodds (Labours shadow chancellor) and the acting Liberal Democrat leader are among those who have argued that the scale of support was not good enough to remove the issue of mass unemployment and loss of long-term opportunities. They argue that small businesses must not be ignored in favour of big corporate businesses, as they may be able to employ people immediately which was the point of the scheme (BBC).
These concerns are not unfounded, as companies are only eligible if they are hiring around 30 Kickstarts at once. Critics of the scheme have been quick to criticise these criteria imposed on employers.
This scheme has also been criticised for its fraudulent possibilities as employers could take advantage of ‘free labour’ and are under no obligation to set out what training they will provide.
Peter Cheese (Chief Executive at CIPD) called the Kickstart Scheme a “bold measure” but has qualified this to say that “employer engagement will prove critical. Similar schemes in the past have floundered as employer pick up was low or largely limited to low-paid opportunities in the public or charitable sectors. This scheme may face similar difficulties if it fails to engage with the private sector, especially at a local level.” (Employee Benefits)
Frances O’Grady (TUC) has called the scheme a “good first step”. (The Sun)
The scheme will undoubtedly help many 16-24 year olds to work and training at a time where unemployment is rife. The government will likely need to provide further support in due course to ensure that young people in the UK are not stuck with long term unemployment.
By providing no criteria on the training that must be provided, the government is subjecting young people, the group which has already been hit hard by furlough to a further lottery. Some employers will go above and beyond in terms of training, whilst others will simply do the bare minimum.
It is a possibility that this scheme will really miss the mark and only end up helping large UK businesses (those able to make 30 or more hires at one) recover from the pandemic with free labour. The choice to exclude smaller businesses from this scheme has not gone unnoticed.
The administration for businesses to group to take part will be an excluding factor for many who would have otherwise participated in the scheme. This means young people will miss out on those opportunities. The £300 administration funding is not likely to cover the actual cost to time and resources that organising the scheme will take.
Only time will tell how well employers participate in the scheme. It is hard to know what quality of training will be provided if young people will be kept on after 6 months, and ultimately how successful the scheme will be overall.
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