The measures announced by the Government show its greatest fear: that those currently benefiting from the furlough scheme – numbering over nine million – will ultimately find themselves on the unemployment register as the scheme ends. Young people are among the hardest hit. A staggering one-third of all 18-24 year-olds have lost jobs or been furloughed during the pandemic.
The Chancellor’s plan for jobs announced yesterday is to be welcomed. But does it go far enough? As the Government plots a route back to work for the nation, it has revisited a theme that policymakers have dabbled with since time immemorial: apprenticeships.
Last month, Boris Johnson talked about an apprenticeship guarantee for every young person in the country.
This is a radical and welcome ambition. With it, the Government recognises that behind the unemployment figures is a skills crisis.
My company, HomeServe, has a privileged window on to skilled trades. We own the largest online platform for tradespeople in the UK: Checkatrade.
As we begin to emerge from the Covid-19 pandemic, there has been a surge in demand for home improvements. A recent Checkatrade poll showed that over half of the people surveyed have noticed more things wrong in our homes during lockdown than ever before, and they are planning to spend at least £1,000 each on vegetable plots, outdoor social spaces and home offices. The biggest challenge we face is finding enough skilled tradespeople to do the work.
The strategy of increasing the number of apprenticeships is clearly the right one. Where governments have fallen short before is in the execution. For all the fanfare of George Osborne’s apprenticeship push in 2015, the number of young people embarking on an apprenticeship has fallen by over 20pc to below 400,000.
The Apprenticeship Levy, the tax on large employers to fund new apprenticeships, has done a lot to push degree-level apprenticeships, but has missed the mark on promoting skilled work as an alternative route to a university education.
The measures announced yesterday are a step in the right direction. The decision to increase financial support for apprentices aged 16-18 from £1,000 to £3,000 is positive, with incremental incentives for other age groups – but it doesn’t go far enough. Our research from tradespeople confirms that the key disincentive to taking on apprenticeships is the cost. The threshold to get a small business over the line is closer to £7,000, which would cover around half the cost of the apprentice in the first year.
Our research shows that almost three quarters of trades would consider taking on an apprentice if the Government provided this level of meaningful support. It is a small cost for something that could be transformational in closing the skills gap and helping thousands of young jobseekers kickstart their careers.
Funding could also be diverted from the Levy, of which a significant sum goes unspent every year.
Second on the list of disincentives is the complexity. For small businesses, every hour spent on admin is an hour of work lost. In an age where we can open a bank account in a matter of minutes, apprenticeship applications can take weeks to complete. The process must be much simpler.
These two steps could see us add 50,000 SME apprenticeships within 12 months, and many more beyond.
Last month I promoted Robert Judson to CEO of HomeServe Now, which connects customers to engineers via an app on their phone.
Rob joined HomeServe straight from school in 2003 on a training scheme in our call centre. His practical experience is invaluable to our executive committee.
Big business has a role to play. This month HomeServe is launching our own not-for-profit foundation to encourage other employers in the sector to take on and train more apprentices to a high standard.
But it is government that will make the greatest difference.
Apprenticeships are one of the keys to unlocking the potential of a post-Brexit Britain. It is time for the Government to fully recognise their true value to our future.
Richard Harpin is chief executive of HomeServe