Following the Chancellor’s removal of the minimum placement criteria for small business on Friday, the Devon & Plymouth Chamber has learnt that this action was taken in response to the Treasury’s concern over providers who were failing to pass on the £1,500 training grant to employers and gateways being slow to respond to small business.
For each placement, gateway providers receive £300 to support administrative costs, while employers are supposed to receive £1,500 per placement for help with setup costs and employability skills training.
Gateway providers and employers were free to come to "suitable arrangements" on how that support would be provided.
However, it would seem some gateway providers saw this as a revenue opportunity and were charging employers the full £1,500 for wrap around support.
Stuart Elford, CEO of the Devon & Plymouth Chamber said: "This is very disappointing to hear that other gateways have failed to see the principle beyond this scheme and instead have put their own interests first.
"The Chamber has always accepted that this scheme is designed to tackle what will be a growing issue of youth unemployment over the next few years as we recover from the economic crisis and it is paramount that the needs of the employer and the young person are at the heart of any gateway offer."
Stuart added: "When we registered as a gateway, we made sure the employers would have a choice of organising their own Employability Skills training and retaining the full £1,500 grant or contributing £200 to access extensive wrap around support from the Further Education (FE) colleges in the county, with the option to access additional funding programmes.
"Despite the Chancellor's statement. we will continue to work with employers and FE colleges to offer a great value for money service and ensure we play our part in supporting the Devon economy to bounce back better."
The Chamber's Gateway offer has already secured 615 placements from 182 employers and will continue to be open to all.
Employers are telling Devon & Plymouth Chamber that they are happy to go through us as a gateway organisation as they don’t have the capacity to complete all the necessary bureaucracy.
The current bottleneck is at the Department for Work & Pensions (DWP), not with gateways, so widening the funnel pouring into that bottleneck is going to create further delays not less.
Stuart added: "This scheme was announced by Government without the systems in place to deliver and this has caused frustration for business and to us as a gateway.
"I'm pleased to say working alongside DWP in Devon, we have sorted out all the processes and applications are now being processed and young people getting into work, which is what the scheme is all about."
Find out more about the Kickstart Scheme here.