Giving Young Workers a Kickstart: New Government Scheme Announced!
Key contact: Claire Knowles
Author: Adam McGlynn
The Department for Work and Pensions has released guidance on the new Kickstart Scheme (the Scheme), intended to combat unemployment rates among young people in the UK. Originally announced as part of Chancellor of the Exchequer, Rishi Sunak’s ‘Plan for Jobs’ speech, the Scheme promises a £2 billion support package to create 6-month, fixed-term work placements for 16 to 24 year-olds currently on Universal Credit and at risk of long-term unemployment.
Any organisation can apply to participate in the Scheme, regardless of size. However, in order to apply directly, the employer will need to create at least 30 kickstart placements, which will be difficult for smaller businesses. To participate in the Scheme with fewer than 30 placements, organisations will first need to partner together and appoint someone to apply on the partnership’s behalf.
There are currently no restrictions on which organisations can form a partnership although guidance suggests aligning with similar employers, local authorities, trade bodies, and/or registered charities. DWP Partnership teams are able to help employers who are looking for partners and representatives. Appointed representatives must have robust financial and governance processes in place and have experience managing partnership agreements. Representatives will be assessed in terms of suitability before partnerships are accepted onto the Scheme so a competent representative will be invaluable both at the outset and over the course of the Scheme.
The kickstart placements must comply with the Scheme’s requirements in order to count towards the 30-placement minimum and to qualify for grant reimbursement. The placements must be new roles which would not exist without the Scheme and do not replace the work of existing contractors or employees.
Vacancy created for the Scheme will need to offer at least 25 working hours per week for a fixed-term of six months. The employee must be paid at least the National Minimum Wage for their age group and the employer will also need to make NI and pension contributions and abide by statutory health and safety duties. The relevant NMW figures are £4.55 for under 18s; £6.45 for 18 to 20-year-olds; and £8.20 for 21 to 24-year-olds, however, employers may pay more if they wish.
The placement is not an apprenticeship but bids should explain how the employers will support the professional development of those filling the new roles. Organisations are expected to support those joining them with career advice, CV and interview preparation, and developing transferable skills including teamwork, attendance, timekeeping, organisation, and communication. The roles should not, however, require the employees to undertake extensive training beforehand. Although it is not expressly mentioned the roles should presumably also not require the individual to hold any advanced qualifications.
To apply the organisation, or representative, will need:
- the Companies House reference number(s) and/or Charity Commission number(s);
- the organisation address(es) and contact details;
- details of the job placements and their locations;
- evidence that the placements are new roles and meet the Scheme criteria; and
- information about the support the organisation(s) can give to develop employability skills.
Successful application will receive a grant agreement letter within one month, detailing the terms of the funding offered under the Scheme. The agreement will need to be signed on behalf of the organisation/ partnership and returned with further details of the roles to be provided to the young candidates. Unsuccessful applications will receive no right of appeal, however, there are currently no restrictions on submitting subsequent applications.
Organisations participating in the Scheme will be entitled to reimbursement, paid in arears, amounting to each employee’s NMW for 25 hours per week as well as associated employer National Insurance contributions and employer minimum automatic enrolment contributions. Employers will have to bear the cost of any top-up payments beyond this amount. £1,500 will also be available per placement for setup costs, training, and support provided to develop skills and transition to sustained employment. Representatives can also receive £300 to cover administrative costs.
For more information on the Kickstart Scheme, and to explore your business’ options, contact Acuity’s employment team.
Claire Knowles – Partner
Mark Alaszewski – Associate
Rebecca Mahon – Solicitor
Adam McGlynn – Trainee Solicitor