Kickstart jobs scheme: £2bn government unemployment fund for 16 - 24 year olds explained - and who can apply for six month wage subsidy

Work and Pensions Secretary Therese Coffey said the impact of coronavirus was partly to blame for the delay in those beginning their new roles

A £2 billion Government job scheme launched five months ago has seen fewer than 2,000 young people start in their new roles.

The Kickstart programme was launched in September to support firms to offer six-month work placements for 16 to 24-year-olds who are in receipt of Universal Credit and at risk of long-term unemployment.

While more than 120,000 jobs have been created, just 1,868 people have started their placements in the UK as of January 15, the Department for Work and Pensions (DWP) confirmed.

(Photo: Dan Kitwood/Getty Images)

The scheme was announced during Chancellor Rishi Sunak’s economic update on 8 July 2020, which was billed as “a summer statement” and “a mini-budget”.

Here’s everything you need to know about it.

What is the ‘kickstart scheme’?

The fund is designed to help people on Universal Credit aged between 16 and 24 who are at risk of long-term unemployment, and will subsidise six-month work placements.

The Treasury said the kickstart scheme would be part of a "three-point plan for jobs... to help Britain bounce back from coronavirus", with hundreds of thousands of "new, high-quality" subsidised jobs to be created.

Each “kickstarter” job will see the government cover the cost of 25 hours' work a week at the National Minimum Wage. Employers will have the option to top up those payments.

The current National Minimum Wage rates are as follows:

Under 18s – £4.55

18 to 20-year-olds – £6.45

21 to 24-year-olds – £8.20

How can employers apply to take part in the scheme?

Businesses could join the scheme from 2 September, with the state paying employers £1,500 to help set up support and training. The first jobs covered by the scheme started in the autumn of 2020, and will run until December 2021.

The jobs will have the option of being extended, and the scheme covers England, Scotland and Wales. The government said it would provide additional funding to Northern Ireland for a similar scheme.

Larger employers can visit the Kickstart Scheme page in order to register their interest; the DWP has recently announced that from 3 February 2021, businesses will no longer be required to create a minimum of 30 jobs in order to apply for the scheme.

It is hoped that the move will encourage more firms to sign-up.

Selected out-of-work young people will then be offered six-month work placements, for at least 25 hours a week, in order to help them gain experience, skills and confidence. This new scheme is designed to be a stepping stone to further employment.

Why hasn’t it worked?

Work and Pensions Secretary Therese Coffey said the impact of coronavirus was partly to blame for the delay in those beginning their new roles.

Asked why the figure was so low, Ms Coffey told Times Radio: “The scheme only started in September for expressions of interest. We actually got our first kickstarters away in November.

“But I would suggest there was a combination of factors. The impact of Covid means that elements of job training to start were probably hindered, as well as the run-up to Christmas.”

In a separate statement, she said it was the Government’s “ambition” that by the end of 2021 some 250,000 young people will join the programme and begin their placements.