In the July Economic Statement, as part of his Plan for Jobs, Chancellor Rishi Sunak announced that a new Kickstart Scheme would shortly be launched with the aim of creating hundreds of quality jobs for young people aged between 16 and 24 years old. The details of the scheme have been slow coming, but it has now been confirmed that the first placements are likely to be available from November.
The Kickstart Scheme can be used to create new 6-month job placements for young people who are currently receiving Universal Credit. The jobs must be new jobs – with the funding conditional on the firm proving these jobs are additional. The jobs must not replace existing or planned vacancies and must not cause existing employees or contractors to lose or reduce their employment.
Under the scheme, the Government will pay 100% of the relevant National Minimum Wage (NMW) for 25 hours a week. Rates for 16 to 24-year olds are currently as follows:
Age under 18 – £4.55 per hour
Age 18 to 20 – £6.45 per hour
Age 21 to 24 £8.20 per hour
The Government will also pay the associated employer National Insurance Contributions (NICs) and employer minimum automatic enrolment pension contributions.
Employers will be able to top up National Minimum Wage rates.
There is also £1,500 per job placement available for setup costs, uniforms, support and training.
The employer will need to show in their application how they intend to help the participants to develop their skills and experience, including:
- support to look for long-term work, including career advice and setting goals;
- support with CV and interview preparations; and
- supporting the participant with basic skills, such as attendance, timekeeping and teamwork
Once a job placement is created, it can be taken up by a second person once the first successful applicant has completed their 6-month term.
According to the Department for Work and Pensions (DWP), there will also be extra funding to support young people to build their experience and help them move into sustained employment after they have completed their Kickstart scheme funded job. Details of such funding have not yet been published.
Applications for funding must be for a minimum of 30 job placements. However, employers who are unable to offer this many job placements can partner with other organisations to reach the minimum number requirement. The representative applying on behalf of the group can claim additional funding of £300 per job placement to support with the associated administrative costs of bringing together the employers.
Smaller businesses may also be able to apply through an intermediary, such as a Local Authority or Chamber of Commerce, who will then bid for 30 or more placements as a combined bid from several businesses. This will make the process easier and less labour intensive to apply for these smaller companies who can only consider hiring one or two Kickstarters.
The scheme, which will be delivered by the DWP, will initially be open until December 2021, with the option of being extended. With the availability of a grant for a 24-year old worth around £6,500, employers may wish to review their business with a view to becoming involved.