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East Midlands Chamber News

Kickstart scheme underutilised by businesses, says accountancy firm

The Kickstart scheme – a £2bn government initiative aimed at helping young people back into work post-Covid – is being underutilised by businesses, according to a payroll professional.

Under-25s have been disproportionately affected economically by coronavirus, in part because they were over-represented in worst-hit sectors such as hospitality and retail.

In response, Chancellor Rishi Sunak launched the Kickstart scheme as part of his wider ‘Plan for Jobs’ and to prevent a whole generation of the UK’s working population being “left behind”.

However, Phuong Lee – payroll manager at UHY Hacker Young Nottingham who oversees and processes payroll for 180 clients weekly, fortnightly and monthly – said she had seen a low take-up of vacancies since the scheme’s introduction in September 2020.

She said: “Young people have continued to bear the brunt of the pandemic’s impact on jobs, with the number of under-25s on employers’ payrolls falling by 289,000 over the past year. Furthermore, around one in seven young people in the UK are unemployed, according to Organisation for Economic Co-operation and Development (OECD) figures.

“The Kickstart scheme provides funding for the creation of around 250,000 roles for 16 to 24-year-olds. Employers of all sizes can apply for funding to cover 100% of the National Minimum Wage for 25 hours per week for a total of six months, as well as associated employer National Insurance and minimum automatic enrolment pension contributions.

“However, we believe it is being underutilised, mostly due to limited awareness and knowledge of the programme by both employers and the young people it is designed to help. While furlough claims are still dominating payrolls – although they are, of course, dwindling as Covid restrictions ease – we are seeing a lack of wages being paid in via Kickstart.”

East Midlands Chamber helps to create Kickstart roles

Since the programme’s launch, one of the biggest gateway organisations in the country, East Midlands Chamber, has secured funding from the Department for Work and Pensions for businesses to create 2,800 Kickstart placements. However, only 600 of these roles have been filled, with 1,600 live vacancies as of June 2021.

Diane Beresford, the Chamber’s deputy chief executive and Kickstart lead, said: “The fact so many vacancies remain live would appear to suggest that not enough people are yet aware of the Kickstart scheme and what it’s all about.

“There’s perhaps also a perception that jobs created by government-funded schemes aren’t desirable but a third of the roles we’ve helped create are in digital and technology positions, many of which require graduate-level skills.

Diane Beresford

"These are modern jobs in forward-thinking small businesses that want to trial new ways of working and products they otherwise wouldn’t be able to.

“For businesses, it’s a win-win scenario – they’re playing a vital role in giving young people a chance in employment, while they benefit from a risk-free opportunity to do something that could lead to future growth.”

To be eligible for the scheme, the young person seeking work must be aged between 16 and 24 and on Universal Credit or be at risk of long-term unemployment. Businesses have the option to top up the young person’s wage and they also qualify for a £1,500 government grant for training and to help with Kickstart’s set up costs.

Phuong said: “Once an application has been accepted, young people are referred for the scheme’s vacancies through a Job Centre Plus work coach. They are then interviewed for the role by the prospective employer.

“Kickstart runs until the end of December this year when all jobs provided through the programme must begin. Employers can spread start dates up until that date and they will qualify for funding until 30 June 2022 if a young person starts their job on 31 December.”

There is still plenty of time to sign up, although East Midlands Chamber recommends that interested businesses apply to the scheme by the beginning of August so they can access the funding without delay.