Pimlico Plumbers boss, Charlie Mullins talks the end of furlough and job opportunities for young people in the post-COVID world…
As with any recession, the biggest losers tend to be young people, in particular those coming out of education and entering the job market.
And make no mistake, while the economy may bounce back a little as we restart the country’s engine, we ll soon be short of the fuel we need to drive it forward.
Without a steady stream of skilled people entering the market, employers will be facing a talent time bomb that will blow up in all our faces.
We re also about to see an explosion in unemployment when the furlough scheme ends, which will make it even more difficult for young people trying to get their first job.
Boris Johnson promised to guarantee an apprenticeship for every young person in what was an off-the-cuff answer at a briefing a few weeks ago.
It’s a pledge he should be made to stand by, but anyone with common sense will know that under the current system it will be virtually impossible to fulfil.
Frankly, with the best will in the world, most employers aren?t in a position to commit to apprenticeships to the level that’s needed. A lot of firms will be pulling back on recruitment as well as cutting their current head counts.
As a result, even though businesses know they need to invest in their future workforces they just don’t have the resources to spend on apprenticeships.
This will have a horrendous impact on young people. To give it a bit of context, around 1.5m young people made new claims for unemployment benefits in 2009 and 2010 following the last recession. That’s quite a number when compared to the fact that, in the last academic year, fewer than 400,000 started apprenticeships.
According to the Association of Colleges, the body that represents the Further Education sector, there will be a 50% drop in apprenticeship starts next year.
The government has said that it is looking at ways to support employers, particularly small and medium sized businesses, to take on apprentices.
I just can’t see how this is possible with a system that is already broken and built around the lame duck that is the Apprenticeship Levy.
Providing money to fund training is one thing but covering apprentice wages is another matter altogether. To repeat the obvious, if companies are cutting wage bills due to the Coronavirus recession, they won’t have the cash to pay apprentices.
What’s needed is a complete overhaul of the system with a simple idea that I have been pushing with politicians for some time. The unemployment benefit cash needs to be given to employers so it can be paid to the young person in the form of wages.
Apprenticeships can also help solve the adult unemployment issue too.
For those firms in a position to recruit there will soon be more candidates to choose from. However, a job market awash with people won’t help the short or long-term requirements of businesses that need recruits with the right skills.
There ll be lots of round pegs for square holes, which will severely hit the productivity of the economy, worse than it is now and has been for a lot of years.
Creating more adult apprenticeships using the same model of giving unemployment benefits to companies to use as wages is an effective solution.
Yes, it will still mean the government is paying out the cash they would have used for benefits, but people won’t be sat at home taking the money for nothing and the economy will get value from the Treasury’s spending.
They?ll be in a business, learning a trade and helping business develop their current and future workforces. It’s a no brainer and a win-win for school leavers, redundant job hunters, the government and businesses.