Thousands of small companies face being locked out of Rishi Sunak's £2bn flagship jobs scheme after being told they must create at least 30 work placements or band together in a group to qualify.
Business leaders warned that small firms will struggle to access the Kickstart scheme - which offers six-month paid placements for young people at the taxpayer's expense - amid fears the Chancellor’s jobs stimulus is falling flat.
Employers will have to provide a minimum of 30 placements or partner up with a group of businesses through an intermediary to reach the threshold for the programme.
One business leader called the structure “very odd” and said it would put small companies off bidding. Another said they were “floored” by the details. A Treasury source said the scheme could be adapted if needed following the criticism.
Under the scheme unveiled by Rishi Sunak in his “Plan for Jobs”, young workers on universal credit can be offered a six-month work placement by firms.
The Government will pay 100pc of the national minimum wage for up to 25 hours a week plus other worker costs to fund the placements, coming to around £6,500 per worker.
Mike Cherry, chairman of the Federation of Small Businesses, said: “Small firms, who are the largest employers across the business landscape, have long expressed interest in this scheme and will be disappointed to find it harder than expected to take part.
“To put it bluntly, this scheme has not been designed with small businesses front of mind.”
“Without further work, the scheme will leave many without any employment support after waiting for it for so long”.
The FSB said it is in discussions with officials over how to address the concerns.
Joe Fitzsimons, of the Institute of Directors, said: "The 30 placement requirement could give cause for concern, as it's not yet entirely clear how the intermediary system will work on the ground."
The Kickstart scheme was unveiled at the Chancellor's summer update in July and aimed to ease fears of rising youth unemployment. Concerns were raised over the weekend that the scheme could struggle if firms cannot create jobs, while a £1,000 bonus for companies for every previously furloughed workers they keep on until at least the end of January has also faced criticism.
Shadow Chancellor Anneliese Dodds warned officials “can’t afford to get this wrong”
She added: “The Conservative government's Kickstart scheme, which has been delayed, already looks like it lacks that cross-organisational coordination."
A Government spokesman said: “Small and medium enterprises are an absolutely key part of the Kickstart scheme which is why we have designed the system specifically to meet their needs.
"We will continue to work closely with them and their representative organisations to make sure that every business that wants to employ a Kickstart participant is able to.”