Last week’s ground-breaking move by the chancellor to pay employers to save young workers from long-term unemployment was the most significant development in smashing the UK’s decades old skills gap for more than half a century.
It represents a shift in mindset which I was beginning to wonder if I would live to see. For years I have been telling government to pay companies like Pimlico to employ more apprentices and now it seems we are heading in the right direction.
It is just a shame that it has taken a pandemic for apprenticeships and the importance of investing in vocational work-based training to be recognised in this way.
The chancellor’s ‘kickstart’ scheme will subsidise six-month work placements for people on Universal Credit, aged between 16 and 24, who are at risk of long-term unemployment.
For each ‘kickstarter’ job, the government will cover the cost of 25 hours’ work a week at the National Minimum Wage with employers able to top it up if they wish.
On top of that, he will be giving businesses £2,000 for each new apprentice they hire, up to the age of 25.
However it’s not enough; if Rishi Sunak wants to go down in history as the man who powered the re-skilling of the UK he has to go the ‘Full Monty’ and fund apprentices’ wages for a full three year apprenticeship.
What we don’t need are firms taking advantage of the money and just taking on young people as cheap labour and then ditching them once the grant money stops.
There needs to be rules to make sure that real apprenticeships are signed up, and we need to extend the six months. We can’t afford to lose new trainees after 26 weeks and have them going back on the dole. That would be a tragedy!
I also hope that traditional industries, such as plumbing and heating, get a fair crack of the whip when it comes to taking on apprentices, rather than the scheme being focused on sectors like digital and tech.
Other elements of the chancellor’s giveaway could be better used to help fund long-term apprenticeships. For example, bribing employers to take furloughed staff back won’t work because the incentives are all wrong. If companies want to bring people back, they will because they need them, and similarly workers will only return if they want to.
Chucking a grant into the mix doesn’t change any of this and won’t work. On the other hand, promising to pay apprentices’ wages for the full three years of an apprenticeship will make a real difference to businesses, young workers and the economy for decades to come.
This virus pandemic has been an economic shockwave that nobody could have seen coming – unless they were on holiday in Wuhan, China last October – and I would never have wished it on my worst enemy.
But it has laid us so low that we have an opportunity of rebuilding our economy from the ground up. One of the key ways this can be done is by re-skilling our country for a prosperous future where we do not have to rely on the whims of the international labour market to keep our economy booming.
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