Will cash for employers save apprenticeships?

With the world turned upside down due to coronavirus, all eyes were on Chancellor Rishi Sunak as he delivered his summer statement on 8 July. Announcing a number of interventions to help stimulate the economic recovery from coronavirus, top of his mini budget was a number of interventions to help boost apprenticeships.

For those watching Government recently, the focus on education wasn’t a surprise. The Prime Minister, Boris Johnson, has been enthusiastic about the concept of apprenticeship guarantees, as part of the country’s recovery from COVID-19. Funded by a £3 billion skills budget, the concept would enable everyone between the ages of 16 and 25 – with the right qualifications – access to an apprenticeship in a relevant business or social enterprise.

Doomed youth?

The focus on the under 25’s makes sense. Traditionally this group has faced the highest levels of unemployment during recessions and it seems the pandemic is no different. The Sutton Trust has found that as early as April, employers reported that just 39% of apprenticeships were continuing as normal, 36% had been furloughed and 8% made redundant. 17% of apprentices had their off-the-job learning suspended.

Analysis by TES (formerly the Times Educational Supplement) has shown that during the pandemic so far, younger workers have been more likely to lose their jobs, be furloughed or take a pay cut. Unsurprisingly, it’s been reported there was a 60% drop in apprenticeship starts in May 2020 compared to May 2019, with the number of starts for people aged 16 to 18 plummeting by 79%.

Helping hand

To help combat these challenges, Rishi Sunak has committed to paying employers to create new apprenticeships. Under the Government’s Plan for Jobs, payments of £2,000 per apprentice (under the age of 25) and £1,500 per older apprentice, will be made to those hiring a new starter before 31 January 2021.

With the Treasury’s coffers open, the Chancellor also announced the introduction of a new Kickstart jobs scheme to create work placements for unemployed young people and £111m investment into traineeships, by offering businesses £1,000 for every trainee they give a work placement to.

Approach with caution

All this seemed to be good news, but while the industry welcomed financial help for employers, bodies such as the CIPHE urged Government to dig deeper to help micro-SMEs. After all, the plumbing and heating industry is built on the shoulders of SMEs and sole traders – there will be no apprenticeship places without employers.

Criticism was also aimed at the reduced support for the over-25s. With the Coronavirus Job Retention Scheme set to end on 31 October, redundancies will rise. Unfortunately COVID-19 has caused an economic climate that is ripe for rogue trainers, selling a dream of easy-to-complete courses and COVID-19-proof, high-earning careers.

With little protection for learners in place, it’s anticipated we’ll see a return to the 2008 recession, when rogue training providers promised qualifications over months (or even weeks) claiming to condense quality learning into small timeframes.

To complicate matters, the training landscape is undergoing a huge overhaul. From 1 August 2020, all new apprenticeship starts must be on new, employer-designed standards. Therefore, those enrolling with a private provider need to do their homework to ensure they are signing up to a bona fide course. Many will be caught out, paying thousands of pounds for courses that will provide neither the qualifications nor skills required by the industry.

Useful contacts

Continuing with the theme of redundancies, the government has also announced the launch of a new Redundancy Support Service for Apprentices as well as a vacancy sharing service for those seeking new opportunities. Apprentices who have been made redundant or are facing the possibility can call 0800 015 0400 to get free advice, find new opportunities, and access local and national support services offering financial, health and wellbeing, legal and careers advice.

Employers who have vacancies for apprentices are being urged to sign up to the vacancy sharing service. Crucially, those taking on a redundant apprentice before 31 January 2021 will also be eligible for the employer payment of £2,000, or £1,500 per apprentice. You can find out more about this, and sign up, here.

So when it comes to apprenticeships and coronavirus, the government has made its approach clear. The onus has been placed on cash benefits for employers, with support for apprentices who face redundancy. However, with a deadline of 31 January 2021 in place, will short-term cash for employers be enough to save apprenticeships long term?

Find advice for employers on coronavirus on the CIPHE's website.

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