DWP Kickstart "gateway" firms with no trading history approved by algorithm

A UK system approved funding for 'dozens of companies' selected to become "Kickstart gateways" despite some having little to no trading history or being based outside the UK.

 An FE Week investigation discovered that the Department for Work and Pensions (DWP) used the Cabinet Office's Spotlight "automated due diligence checks" as part of the Kickstart selection process. 

The UK government's Kickstart scheme was a new employer initiative announced in summer 2020 aimed at creating six-month paid work placements for young people who were at risk of long-term unemployment. The scheme closed in January 2023.

A Kickstart 'gateway' was a type of organisation, such as a local authority, charity or trade body that would act as an intermediary and apply for funding on behalf of companies wishing to create fewer than 30 job placements.

Gateway firms received a GBP 300 fee per job placement, plus up to GBP 1,500 for every 16 to 24-year-old on Universal Credit they put through the wage-subsidised employment programme.

The investigation raised questions about the quality of gateway providers, as well as about Spotlight's effectiveness. It also prompted the shadow work and pensions secretary to express concern over the potential misuse of public funds and call for urgent action.

The DWP maintained that "Kickstart gateways are subject to stringent checks," despite the findings.

This situation raised questions about the effectiveness of automated approval processes for government programs and the potential risks associated with relying heavily on algorithms for due diligence.