The government should create a £1 billion fund to help furloughed workers to retrain, the Institute for Public Policy Research said today. 

According to new research published by the IPPR, furloughed workers who lose their jobs are less likely to have basic qualifications than the rest of the population. 

The research found that of the 1 million people estimated to be on furlough and in jobs that could be lost permanently due to disruption by the pandemic, 130,000 do not have a level 2 or equivalent qualification, and 250,000 do not have a level 3 qualification.

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The IPPR has called for a new £1 billion Job Training Scheme to be created to help people move out of the sectors that are currently struggling – and says that those on furlough should be given a grant up to £4,000 each to pay for training.

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Dean Hochlaf, IPPR researcher and lead author of the report, said that the pandemic had left us “on the brink of the worst unemployment crisis in a generation” and that further education was central to retraining those who are set to lose jobs. 

“A protracted, painful recovery can only be averted if the government steps up its offer to help those at risk of losing their jobs, so they can find new opportunities in emerging sectors," he said.

"Further education is central to this ambition, and it is welcome the government has already committed to expanding access and funding.

“However, after a decade of harsh austerity, we need to go further. Warm rhetoric around technical education has failed to materialise into action. An enhanced funding settlement for the sector is essential, so that every young person and adult has an educational path that’s right for them, and so that the UK can develop the skills it needs – not only to recover from Covid-19, but to take on future challenges such as climate change and automation.”

A long-term funding settlement for FE

David Hughes, chief executive of the Association of Colleges, said that the chancellor had the opportunity to boost funding for colleges in the upcoming spending review. 

He said: “This IPPR report gets to the heart of both the dire funding reductions that colleges have had to cope with and the vital role colleges play in our labour markets, economy and communities. 

“No other institutions have as much potential to deliver on this and, with a White Paper on the horizon, there is even more potential for the government to release colleges from the shackles of unhelpful policies and clunky regulation. If they get this right, colleges can deliver so much more for people, productivity and places.”    

The IPPR proposes that the Job Training Scheme should form part of a long-term funding settlement for further education, which should also include: 

• A commitment to increasing per-pupil spend for 16- to 19-year-olds in colleges and sixth forms from £5,200 today to £8,300 by the end of the Parliament. 
• An immediate suspension of the condition on people on universal credit who want to retrain or who are already retraining. 
• The introduction of a maintenance loan for the adults who are now entitled to study a level 3 qualification as part of the prime minister's lifetime skills guarantee.