From education to employment

Apprenticeship starts are expected to drop by 50% this September

Jasmine Whitbread, Chief Executive of London First

@London_First and North West Business Leadership Team (@NWBLT) unveil seven-point plan to save apprenticeship system including increased flexibility in the use of Levy funds to financial relief for Levy-funded apprenticeships. Business groups and Mayors of London, Manchester, and Liverpool all back the seven-point-plan, and calls for new Back to Work fund to avoid a lost generation of apprentices.

Business groups London First and the North West Business Leadership Team (NWBLT) have today (Friday) joined forces to publish a seven-point-plan to urge the Government to take immediate steps to support the apprenticeship system, or risk a lost cohort of young people. This would also undo years of hard work by businesses, training providers and governments to build the scale and profile of the UK’s apprenticeship programme.

It comes as they warn that apprenticeship starts are expected to drop by 50% this September amid concerns that the Government’s furlough scheme is masking future lay-offs and fears of rising youth unemployment. Apprenticeships are vital in providing clear long-term paths to skilled employment, but as a result of the coronavirus pandemic, The Sutton Trust has reported that just 39% of apprenticeships are continuing as normal.

Together the business groups are calling on the Government to take action to maintain the sustainability of the apprenticeship training private sector, and ensure businesses are encouraged to continue to employ apprentices,

Jasmine Whitbread, Chief Executive of London First, said:

“Our young people are facing the most challenging jobs market ever, with the economic fall out of the pandemic expected to hit the under 25s disproportionately hard.

“Tackling the scourge of youth unemployment will require the Government to do all it can to support the apprenticeship system. That includes introducing a new Back to Work fund to encourage employers to take on apprentices and making the apprenticeship levy more flexible.

“Businesses – north and south – are united in their support of apprenticeships, and are committed to doing everything possible to give the next generation the opportunity to reach their full potential. But we can’t do it alone. We urge the Government to act now or it risks creating a lost generation of apprenticeships.”

To support a strong apprenticeship system now, and over the next period of uncertainty, the business groups urge the Government to:

  1. Introduce a long-term ‘Back to Work’ fund to help businesses take on apprenticeships, and minimising the costs of apprenticeships to firms, guaranteed for a minimum of three years, which would include the removal of the ‘co-investment’ fee that non-levy paying employers are currently having to find towards to the training of their apprentice.
  2. Provide funding relief fairly for all apprenticeships, so that Apprenticeship Training Providers (ATPs) can be funded where training has been paused.
  3. Support providers and businesses to continue to offer apprenticeships safely, with clear guidance on how to operate safely and suspending face-to-face requirements, so that apprenticeships are not forced to fail through being unable to complete in-person training.
  4. Give businesses greater flexibility in how they use Levy funds, by making it easier to transfer funds to other firms via a single digital transaction, pausing payments and extending the date that they can be used where businesses are unable to return to normal activity.
  5. Improve communications channels between businesses and the apprenticeship system, with a one-stop-shop for employers to access information and support.
  6. Work with SMEs to trial innovative approaches that boost demand, such as shared apprentices.
  7. Promote apprenticeships to young people and their families, emphasise the role of them in the economic recovery, and highlight the long-term opportunities they provide.

As part of this Back to Work Fund, we propose that the Government permits SMEs to use a portion of the levy funding transferred to them by large employers to cover the salary costs of apprentices. This would help minimise costs for both SME employers and Government and it could be achieved via a simple – maybe short term – rule change. We suggest piloting this proposal in Manchester and London. For example, through utilising Manchester Combined Authority’s levy transfer fund of around £4m that is currently not being drawn down due to uncertainty and lack of apprentice starts.

Sandy Lindsay 100x100Sandy Lindsay MBE, Skills Lead and Vice Chair, North West Business Leadership Team, said:

“This is not a time for bureaucracy and delay; this is a time for swift action, innovation and open dialogue between Government and business.

“We are calling on Government to work with us to look at ways to free up finance that can be used to save the jobs of thousands of young people, as well as the skills that will be needed by businesses into the future.”

Andy Burnham, Mayor of Greater Manchester, added:

“Young people must be at the heart of our economic recovery as we emerge from the Coronavirus crisis.  We need urgent action to protect and guarantee apprenticeships so we don’t risk a lost generation.

“Apprenticeships have a vital role in developing a young person’s skills and future career paths.  Now more than ever we need to ensure that the opportunities are there for young people to get the start on the career ladder that they deserve.  In Greater Manchester we’ve set up our own careers and apprenticeship service for young people, GMACS, to support them in planning for their future, but we also need action at a national level.

“I wholeheartedly welcome this plan from the North West Business Leadership Team and London First.  The message from business and political leaders, both North and South, is clear – it is now time for Ministers to act.”

sadiq khan 100x100Sadiq Khan, Mayor of London, added:

“Apprenticeships have a vital role in the capital’s recovery from the Covid-19 crisis by providing important opportunities for Londoners and ensuring the city’s businesses have access to the skills they need.

“I’m urging Government to adopt these seven measures to incentivise and support businesses to create apprenticeships, particularly for young Londoners and those who are out of work who have been among the hardest hit by Covid-19. I’ve called on ministers to give me the powers and funding to establish a London Apprenticeship Service, building on the business support I’ve provided through the London Progression Collaboration.

“We must do all we can to create the opportunities young and economically vulnerable Londoners need now more than ever.”

Steve Rotherham, Mayor of Liverpool City Region, added:

“Young people are one of the groups most affected by this pandemic and will have to live longest with its consequences.  It is vital that we put measures in place that specifically support the generation of young people who are about to enter the world of work.

“Apprenticeships have to be at the heart of the effort to enable young people to develop the skills they need to thrive in a post-COVID economy.  That’s why in the Liverpool City Region we developed Be-More, the UK’s first UCAS-style apprenticeship portal to enable prospective apprentices to find the information they need in one place.

“But we also need action at a central government level.  I’ve long advocated for greater flexibility in the use of the Apprenticeship Levy and for government to properly support this vital route to skilled employment.  I wholeheartedly support this plan’s recommendations and call upon the government to act now.”

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