AELP: £8.6bn skills package needed to boost the post-pandemic economy

@AELPUK : An additional £8.6bn skills package needed to boost the post-pandemic economy

• £3bn for Adult Education Budget (includes proposed adult traineeships)
• £1.5bn for apprenticeships
• £0.45bn for 16 to 18 year old programmes (includes 16-18 traineeships)
• £3.6bn wage subsidy for apprenticeships for 16 to 24 year olds.

The Association of Employment and Learning Providers (AELP) have submitted an £8.6bn costed proposal in advance of the expected July statements from the prime minister and the chancellor. As a result the AELP call for the government to introduce separate support packages for young people and adults as part of its post-Covid skills response.

Independent commentators, including the Institute for Fiscal Studies, have pointed out that younger lower skilled workers are most likely to become unemployed as the furlough scheme ends and AELP agrees with Boris Johnson that some form of apprenticeship guarantee is required to support them.

The AELP submission to ministers calls for an apprenticeship wage subsidy to encourage employers to make opportunities available for young people aged 16 to 24, arguing that the subsidy is most needed at levels 2 and 3.  To potentially support half a million young apprentices, the subsidy cost could be around £3.6bn.

For adult workers, AELP believes that the government should ‘park’ plans for a £3bn National Skills Fund and £100m National Retraining Scheme and instead channel the funding mostly into well established adult skills programmes.  The annual adult education budget (AEB) of £1.5bn needs increasing to £4.5bn to help tackle mass unemployment and support vital reskilling for those who have remained in work.

The required additional investment overall would be £5bn for skills training and £3.6bn in wage subsidies – the total of £8.6bn being relatively modest compared with the estimated £60bn currently being spent on furloughing. 

The AELP maintains that now is not the time to use the apprenticeship levy for skills programmes other than apprenticeships.  There was a significant apprenticeship overspend on the levy before the pandemic and the levy take will have fallen sharply during the crisis, meaning that every penny will be needed to fund apprenticeships during the recovery period.

AELP Calls for new elements of support

In addition to putting boosters under traineeships, the government should introduced a pre-apprenticeship programme for young people and adults which involves a job commitment being offered by an employer from day 1.

AELP would also like to see traineeships introduced for adults aged over 25 as part of the recovery effort as well as an allowance paid to young people on a traineeship programme. 

Building on the examples set by the metro mayors, free travel should also be considered for 16-24 year olds nationally in respect of apprenticeships and other skills and employment programmes.    

Collaborative approach needed

Following the announcement on Monday that the Business department (BEIS) has set up a working group to look at apprenticeships and skills, AELP calls on the government to ensure that a fully joined-up cross-departmental collaborative approach between the DWP, BEIS and DfE is in place for employment and skills.   Furthermore, the government should work closely with the devolved authorities.

Mark Dawe, Chief Executive of the Association of Employment and Learning Providers (AELP) said:

“The country can’t wait for the government to take 6 months to come up with entirely new employment and skills programmes.  Instead it needs to mostly scale up existing programmes using trusted delivery partners.

“The prime minister’s proposed ‘apprenticeship guarantee’ shouldn’t be dismissed as unworkable, but employer sign-up is essential and this requires a realistic level of wage subsidy during the recovery period.

“While young people are likely to be the worst hit after furloughing ends, adults in and out of work need proper support too and AELP believes that a major injection of funding into the adult education budget is essential.  Our costed proposals focus on getting people into work and keeping them there and we believe that they will deliver value for money as well as making a big difference to people’s lives.”

AELP’s latest submission ‘Working with Skills: The Comprehensive Skills Approach – Investment Now to Secure Our Future’ is an extension of their previous Covid-19 Employment Challenge paper and proposals to kickstart traineeships.