Posted: Wed 2nd Sep 2020
The government has opened applications for the new Kickstart scheme, which provides 100% funding for businesses to employ young people, but founders of small companies have reacted with disappointment.
Announced by chancellor Rishi Sunak in July, the initiative allows firms to offer six month placements to 16-24 year olds who are at risk of long term unemployment with their salaries for 25 hours a week covered by the government. Business also get £1,500 per job for set-up costs, support and training.
There is £2bn in funding available and the government says hundreds of thousands of jobs will be supported.
"This isn't just about kickstarting our country's economy," Sunak said, "it is an opportunity to kickstart the careers of thousands of young people who could otherwise be left behind as a result of the pandemic.
"The scheme will open the door to a brighter future for a new generation and ensure the UK bounces back stronger as a country."
Small businesses disappointed by Kickstart scheme
Employers can make an application for the funding from today but only companies with a minimum 30 placements can apply directly. Employers with less than that need to partner with other organisations to reach the minimum. That means small business owners who are keen to employ one or two young people have to join a group.
Niki Cassidy, managing director of sound equipment hire business Rigs and Gigs, said she was "delighted" by the original announcement but is disappointed by the 30 placement minimum which she describes as "a kick in the teeth from the government towards SMEs".
"The announcement that you have to have 30 placements is crazy," Niki added. "We've got three job roles. How does this help the huge number of micro businesses?
"If at the start of 2019 there were six million UK private sector businesses and 4.5m (75%) have zero employees, then it's highly unlikely they'll be employing 30 new members of staff. Accessing other employers via employer representatives is crucial, otherwise it's another average roll out of a half thought through initiative."
The government says small firms can team up with organisations such as trade bodies or come together as group of employers. The group must be led by someone with "experience of managing partnership agreements with third parties" and have "robust financial and governance processes to manage the application". Further detail on how to become an intermediary has not yet been published.
MP Mims Davies responded to criticism by a small business owner on Twitter who said they can't access the scheme.
"You most certainly can be included via an umbrella organisation," she said. "We will keep all this under review but we need to be able to manage the opportunities and support for young people and get started swiftly. All details are here but we will test and learn as we go."
Enterprise Nation is interested to hear from small business owners looking for help in making a joint application for funding through Kickstart. Email Dan.