Graham Hasting-Evans from @NOCNGroup discusses the Chancellor @RishiSunak's Summer Economic Statement
COVID-19 presents the greatest challenge to our Country since World War Two. Accordingly, we need actions that match up to the scale of the challenge.
We will fight our way back out of the oncoming depression by four major underpinning strategies:
- One is stimulating demand in the economy in such a way that it will help position us for the post-COVID-19 world.
- Second is investment in the country’s infrastructure, both physical and digital.
- The third is by fundamentally upskilling our young people and adults so that the UK workforce is much more productive and digitally savvy.
- Finally, we must build confidence in the economy and we cannot do that if we do not have realistic and believable plans for the other three strategies.
It is people that make things happen, so I believe ‘skills’ is the most critical of the four.
So, let us reflect on where we are. On 8 July the Chancellor announced cash incentives for employers to take on apprentices under the age of 25 in the 6 months between August 2020 to January 2021, as well as an additional £111 million for traineeships in England and £101 million to give 18 to 19 year olds who are struggling to find work in England the “opportunity” to study “targeted high value level 2 and 3 courses” throughout 2020-21. In addition, the ‘Kickstart’ scheme will pay the wages of “hundreds of thousands” of people aged 16 to 24 who are claiming Universal Credit when they take newly created six-month work placements with employers. However, ‘Kickstart’ does not seem to include formal structured training and credentialing.
Since 2013 the two major pieces of Government skills reform have been Apprenticeships and T Levels, both primarily aimed at 16 -19 year olds. The first phase in the introduction of T Levels begins this September, with a limited number of providers and learners, and it will be 2023/24 before there are sufficient places to make a sizeable impact.
On Apprenticeships, before the reform and introduction of the Levy, we had some 450-500,000 starts, against a Government target of 600,000. Prior to COVID-19, starts were down to an annual run-rate of around 250,000. Recently this has fallen to an annual run-rate of 150,000, many of which are adults, not people below 25 years of age. Even with the Chancellor’s incentives for the period up to January 2021, starts are not going to dramatically increase. Factor in that, over the next six months, many employers will need to focus on survival and streamlining their workforce, rather than on recruiting apprentices. At the same time, with millions more unemployed, the Levy pot funding will shrink. As a result, we are going to be left with too few apprenticeship places for the demand.
So, T Levels and Apprenticeship Reforms are not going to help the urgent problem we are facing now, with young people who have finished their courses and those about to start in September – less than 2 months way.
Traineeships, “targeted high value Level 2 and 3 courses” and ‘Kickstart’ could clearly help those young people currently finishing their courses and provide a bridge to employment. However, the risk is that insufficient numbers of employers will be able to support traineeships and work placements, at a time when they are making existing skilled employees redundant.
The other question is what to do with the young people who are due to start courses in September 2020 and those starting their second year. With limited places for T Levels and apprenticeships there will be a sizeable proportion of the intake that need a real programme that will prepare them ultimately for employment in 2021 and 2022. The only practical solution is to use traditional courses with the best of our existing qualifications, together with supplementary work experience/boot camps and strengthened assessments. There is nothing else that can be made available in the timescale.
In addition to all of this, over the next 12 months we cannot only focus on young people. The biggest challenge is upskilling and reskilling of adults, both in the workforce and unemployed. The need for increasing productivity, ramping up digital and ‘green’ skills and tackling unemployment is clearly understood. What is not clear is the plan to tackle this from September 2020 onwards.
There is still a phenomenal amount to do to put in place a robust, deliverable and funded skills plan, and to start implementation for September 2020, so that we can drive up productivity and position the economy for the post COVID-19 environment. And there is not much time left!
Graham Hasting-Evans, Group Managing Director, NOCN Group
NOCN Group offers a wide range of education and skills services, including regulated qualifications, EPA for apprenticeships, Traineeships, Job Cards in construction, Access to HE Diplomas, bespoke accreditation and educational and skills support training.