Warning against Kickstarter scheme as Prestwich business owner loses thousands

Naomi Fox, 22 and her employer Fiona Lee, from Rose and Lee Interiors on Bury New Road, have been challenging the Department for Work and Pensions after months of missed "Kickstarter" payments.

Designed to "kickstart" the careers of 16 to 24-year-olds, the scheme allows young people to attain paid work placements without costing the small business any money.

Video by Heidi McGovern and Harriet Heywood.

The DWP and a selected gateway business manage the finances during this six-month placement, once this is finished, the business owner is given the option to hire the Kickstarter at their own expense.

But after the gateway company, Core Selection Limited, which was supporting Rose and Lee went bust, all that help was undone.

An email from the DWP seen by the Bury Times said: "The DWP Review Board initially agreed to fund all current participants for the remaining duration of their placements.

"However, since this decision was made, DWP have been informed by Core Selection Limited that the company now has insufficient assets to meet its liabilities and is insolvent...we are therefore unable to release any further grant funding to the gateway organisation and the grant agreement as between DWP and Core Selection Ltd is now fully terminated, including in respect of all current Participants."

The DWP's only advice to Fiona, who had already lost thousands, was to "sack" Naomi.

Naomi Fox

Naomi said: "I didn't choose to go on this scheme, my job coach just put me as a Kickstarter without my knowledge and although I had no idea what it was, it got me a job at Rose and Lee."

Naomi began her placement in November, immediately falling in love with her role.

However, she said payments from Core Selection were late on a regular basis, meaning Fiona would cover the costs until the money came through.

Naomi said: "I was meant to be on the placement until May but in February, something happened to Core Selection, they stopped paying us and then Fiona was told to sack me.

"I don't want to lose a job I love for doing nothing wrong and Fiona wants me to stay on.

"It has been so frustrating not knowing if I will be paid each month on a government scheme I didn't even want to go on."

An official letter was produced by Core Selection on March 1 detailing the dissolving of the company.

On March 21, the DWP produced a similar letter, ultimately terminating the contract of the Kickstarters.

It reads: "If you wish to make a private arrangement with any current participants to enable them to finish their placements with you, you are free to do so.

"However, DWP will no longer be able to issue grant funding via Core Selection Ltd to cover any associated wage costs.

"Any such arrangement would therefore need to be funded by way of your own resources."

The letter details that Core Selection is insolvent and that all payments, up to and including March, were made from the DWP to Core Selection, and to contact them if they haven't received it. 

Despite the blow of these letters, last month, Naomi received something even more unexpected than that.

She said: "I got my certificate congratulating me on finishing the Kickstarter.

"I had to laugh. No-one had told me anything. No-one emailed me about the company going bust, my wages, what the course was, nothing.

"Everything I know I had to get from Fiona. This scheme was meant to be for me and not a word has been said about it to me."

Fiona has been fighting against Core Selection since early this year and was almost ready to give up.

Fiona Lee

She said: "It is a lot of money that I have lost, especially for a luxury small business in a cost-of-living crisis.

"Because of these months of missed payments, we have to be so careful.

"I've even missed rent just so I can pay Naomi. 

"We shouldn't be in this position when we have worked this hard.

"I had the cash flow to deal with the cost of living but Naomi's wages weren't in my forecasts, so now the rug has been pulled from under our feet and I have been left with debt. 

"I was almost ready to give up until they sent her the well-done certificate.

"It made it clear that the DWP had allocated the funds for the full six months but she was only able to complete three.

"Now they are just trying to wash their hands of us after a gateway company they used collapsed.

"They have put a business, a livelihood and Naomi in jeopardy. They have undone any help they initially gave."

Without the funds to seek legal advice to challenge Core Selection, she has been contacting the DWP on the options now available.

In an email seen by the Bury Times, the DWP said "you must take action against them as you would any organisation which owes you money. DWP cannot give you legal advice as to how best to do this."

However, when approached by the Bury Times the DWP stated: "All Kickstart participants have employment contracts, meaning they are entitled to legal protections. DWP will advise individuals on how to take action in the rare case that this is not resolved through DWP channels."

After the contradiction, Fiona expressed her ongoing frustrations, she said: "I have been hung out to dry by the DWP and I want this to be on their shoulders. 

"My business could be bankrupted by a scheme meant to help young people and small businesses.

"The DWP were happy to hear my complaints about Core while they investigated them but used me as ammunition and failed to tell me the situation."

One of the letters, also seen by the Bury Times, said: "It was explained to you in this letter that your Employer Agreement is with Core Selection and not with DWP.

"It was also explained that all funding for your Kickstart placements has ended.

"It was explained that you have the option to retain your Kickstarters as normal employees."

In response, a DWP spokesperson said: "We review all businesses that apply for funding and keep them under review, making it clear that if they no longer meet our standards, we will be forced to terminate our contracts."

"Our work coaches will continue to support young people to get into their next role, having already helped over 165,000 into paid work through the Kickstart scheme."

Naomi, who the DWP allegedly told Fiona to sack, said: "It has all made me think. Are there other people in my situation trying to speak up as well?

"You feel as though you're getting help with a six-month paid placement but you're not. 

"You spend your time worrying about payments or trying to find someone to communicate with and I wouldn't recommend it".

Reflecting on the struggle, Fiona said: "February's payment came and went, but because it was a government-backed scheme I didn't think anything untoward of it, now I'm thousands of pounds in debt.

"I've run this business for nine years and now im struggling through no fault of my own- do they want us to close our doors just because this has just gotten too hard to handle?

"I asked if we could use another gateway to finish the placement but they said no, she was no longer on the scheme...but she still recieved a certificate of completion."

Efforts have been made to contact Core Selection.

If anyone else had had a similar issue with their Kickstarter scheme or Core Selection Limited email Harriet.Heywood@newsquest.co.uk.