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Scrapping the 30 person threshold for Kickstart is good news to small firms

Mike Cherry, National Chair of the Federation of Small Businesses (FSB)

We are currently in the midst of one of the greatest health and financial crises the country has ever seen, and yet despite this there is hope that when we turn a corner, we’ll be able to bounce back even stronger.

The past year has been incredibly difficult, for all small firms, faced with multiple lockdowns, regional restrictions and loss of income which for many has led to months of furlough or sadly loss of work all together.

With the vaccine rollout and the hope of easing restrictions in the coming weeks and months, attentions turn again to how we unlock, re-energise and kickstart the economy once more.

The pandemic has forced businesses both big and small to close while allowing others to adapt and evolve, which will result in a different economy, a transformed high street and a change to how we hire.

Helping young people get back onto the jobs ladder

The Kickstart scheme which was launched last summer is one way that small businesses have been able to help young people on Universal Credit to get back onto the jobs ladder. It is young people, in lower paid work, in the worst hit sectors that have been most affected by this jobs crisis.

Long before the pandemic, small businesses were already at the heart of their local communities, and that has long included in many cases providing work or apprenticeships for young people. Through Kickstart they are able to expand their workforces while helping young people, who have been hit the hardest during the pandemic, to get back into work.

Schemes like this are open to all businesses, but it’s vital that they are designed with small firms in mind. With fewer employees, small firms are able to spend greater time honing individual skills and nurturing talent, which benefits both the employer and employee. But small business owners struggle the most with paperwork, formal policies and processes.

Big businesses have far more access to greater resources to hire new people to their firms, but often are centred in towns and cities, leaving other areas behind such as those in more rural spots and those not in large regional hubs such as London, Birmingham and Greater Manchester.

Small firms are best placed to ensure no area is left behind 

Small firms exist in both the big cities and the small villages, along the coastline and the heart of the country. This geographical spread means small firms are far better placed to provide a more even distribution of opportunities, helping bring employment to communities and ensuring no area is left behind.

There have been several bumps in the road however for Kickstart since it was launched, notably the 30 person threshold announced in September. While the scheme was declared ‘open for business’, small firms had to wait for an intermediaries system to be created. In late 2020 FSB in partnership with Adecco Working Ventures (AWV) were one of several organisations able to act as gateways or intermediaries, allowing small firms to get onboard the scheme by offering as few as one or two placements. 

Enabling sole traders to take part in Kickstart

At the centre of the scheme is the delivery of high-quality wrap-around assistance for a young person on Universal Credit that will require support. In addition, we managed to negotiate with the Government for this to be a way for sole traders to take part in Kickstart. While originally excluded from Kickstart as they are not an employer or have payroll, our scheme manages that for them – AWV is the employer and provides payroll and full wraparound support, including mentoring and development throughout the six-month placement and beyond.

Promisingly, 120,000 roles have been created through the scheme, at a time when unemployment continues to rise and the pandemic shows little signs of easing in the immediate future. However fewer than 2,000 young people have secured these roles as the vast majority are held up for approvals to go through the final stages – sharing the roles with Job Centre Plus to advertise them; interviews and selection; appointment; and agreement on the start date.

Scrapping the 30 person threshold is welcome

Since then the government has scrapped the 30 person threshold which we welcome.  This is good news to small firms who felt as though they were missing out on the project.

It provides another way to access Kickstart, and adds to the options from which a small business can choose the one most suitable for them. But this will undoubtedly lead to a surge in Kickstart applications, which is why it’s important that those who have applied already, especially small firms through gateways such as our own, aren’t now faced with delays for the potential placements that are being processed. 

Government must unblock these as its first priority, as this will enable thousands of young people to start working in small businesses across the country.

It was good to see the Government doing more to make the Kickstart initiative as accessible as possible to small firms, and further efforts to re-energise the economy should see the Kickstart approach extended to other groups who are struggling in the labour market.

Gateway schemes offer capacity and resources to deliver wrap-around support

And while small firms can now access the scheme through their own volition, it shouldn’t undermine the continued importance of some gateways.

We created our gateway scheme with the knowledge that some small firms just won’t have the capacity or resources to deliver the wrap-around support that the Government requires for those on Kickstart placements.

The next few months will continue to be difficult for everyone, and that’s why these schemes can offer real change to individuals looking for work and small firms wanting to expand.

Small firms are at the very heart of our communities and are the backbone of our economy, which is why, as we’ve seen with Kickstart, it is vital that any recovery is designed with small businesses in mind.

Mike Cherry is the National Chair of the Federation of Small Businesses (FSB)

Mike has been an active FSB member for more than twenty years. He is committed to ensuring the voice of small firms is heard at the highest levels and regularly meets with the Prime Minister and Business Secretary. Mike understands the demands of small businesses. For more than 40 years, he has run a successful timber and manufacturing business, W.H Mason & son in Burton-On-Trent.

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