The Kickstart Scheme
26 January 2021
In July of last year Rishi Sunak took the unusual step of issuing a “Summer Statement”. This announcement looked at various ways of restarting the economy and jobs market following what was (then) hoped to be the nation’s one period of lockdown in response to the challenges of COVID-19.
Several periods of local and national restrictions later and it would be all too easy to overlook that speech. Yet some of the messages from that announcement continue to resonate, and one such area is the new “Kickstart” initiative. The scheme - which has been underway since September - is designed to help younger workers (a demographic hit particularly hard by the economic downturn) onto the first rung of the employment ladder in these very difficult times.
To achieve this objective the government have committed to funding each Kickstart job placement for 25 hours per week at the appropriate level of National Minimum Wage. This funding will continue for six months, and in addition the government subsequently also offered a sum of £1,500 per placement to cover any additional costs incurred by the employer in this exercise. For fuller details please see this post written in September 2020.
Roll forward to 2021, and the government has provided an update on Kickstart progress so far, and also announced a new and significant improvement to the scheme.
Progress to date
The headline message is that over 120,000 Kickstart placements have been created – and this despite the challenges of the pandemic. It is therefore clear that there is a genuine employer appetite to support such a scheme.
Yet the first placements were due to start in November, and this coincided with much of the nation returning to lockdown. It follows that few young people have so far been able to take-up their placements, and figures from the DWP suggest currently fewer than 2,000 have actually begun work. Sadly this is unlikely to change until the current lockdowns have been lifted, after which there is sure to be a surge of new starters.
Removing a problem
This hiatus has however provided government with an opportunity to refine their Kickstart proposals further. In particular there has been some concerns around the original requirement that employers could only apply for places and funding if they were able to create a minimum of 30 placements.
This criteria effectively prevented many small and medium sized employers from directly participating in the Kickstart scheme. Those that did often had to unite with other employers or utilise a “Kickstart Gateway” organisation to reach the 30 placements minimum. Understandably these extra hurdles dampened the enthusiasm of some hard-pressed smaller organisations to engage with the scheme at what was already a difficult and challenging time.
Which is why the government has now announced that the 30 placements minimum threshold will be entirely removed. This will be welcome news to the many employers of all sizes that would also like to participate in the scheme.
Don’t overlook the health risks
So, as soon as lockdown restrictions ease, it seems likely that there will be tens of thousands of new Kickstart joiners across the United Kingdom, with many more candidates to follow as further places are created.
This rush of new young entrants to the labour market will perhaps raise some new questions and challenges for employers. And one such issue is whether these Kickstart workers should also be entitled to other benefits in addition to their government funded pay.
Many employers will not be giving this much thought as yet. But any employee – even one that is being funded via the government – is surely deserving of the same protections as their colleagues? This would be true at any time, but is perhaps even more evident given that we are in the midst of a global health crisis at present.
So it’s likely that at least some employers might want to extend cover such as Group Life, Group Income Protection, Group Private Medical and Health Cashplans to their new placements. Such a course of action might well involve the employer in some minor costs and administration challenges, but the potential returns of goodwill, engagement, and productivity should outweigh these concerns. And of course the government’s additional payment of £1,500 per placement is likely to easily cover any extra costs that arise.
Finally, and not least, it should also be remembered that the dual objectives of the Kickstart scheme is to allow youngsters to start their career whilst simultaneously enabling employers to cheaply source and asses new young talent for the challenging years ahead. It follows that employers who willingly go a little further than basic pay alone in supporting Kickstart placements are probably putting themselves at the front of the queue to attract and retain the best talent from this very welcome government initiative.
For more information on any of the above topics, please speak to your usual Howden Consultant in the first instance, or visit our website for other contact options. For the latest details on COVID-19 & Employee Benefits provision please visit our coronavirus hub.
Steve is Head of Benefits Strategy, Howden Employee Benefits & Wellbeing, and is an award-winning thought leader on Pensions, Employee Benefits, and Human Resources issues. He is occasionally accused of making Employee Benefits interesting.