The government should better incentivise employers to take on apprentices, rather than setting up new initiatives like the Kickstart programme, Labour’s shadow apprenticeship and lifelong learning minister has said.
More than 6,000 people signed up to the government’s flagship £2 billion Kickstart youth employment scheme on its first day of operation last week. The scheme funds employers to offer young people on Universal Credit or at risk of long-term unemployment work placements.
It was announced by chancellor Rishi Sunak in July among a range of measures to support young people – including funding to pay businesses £2,000 for each young apprentice, and £1,500 for each apprentice aged 25 and over they hire.
Speaking at today’s Association of Employment and Learning Providers Business Recovery Conference, Labour MP Toby Perkins said he had spoken to providers hugely worried about their future, with some sectors having seen a 90 per cent drop in starts as a result of the coronavirus pandemic.
He said: “My overall view is that government have created a variety of schemes which will take a huge amount of work to set up when the key priority should be to do more to boost the existing apprenticeship networks that are already well established.”
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He explained that too many small businesses and employers found the system overly bureaucratic and that the levy had “shut many of them out”.
Support for apprenticeships
Mr Perkins said: “We recognise how stretched the government is, and for that reason the easiest way to support both learners and companies is to build on and supplement existing schemes, rather than create mammoth new ones. We have seen with things like Test and Trace and PPE [personal protective equipment] that setting up things from scratch is very difficult and you have failings along the way, and with Kickstart it is something that I fear that the amount of investment that has gone into that might have been better placed making the apprenticeships incentives more generous and focusing people more directly on the importance and need for new apprenticeship starts.”
He said FE providers had told him that the Kickstart scheme had acted as a disincentive to take on apprentices.
“Government probably have a clear idea in their mind which scheme applies to which sort of learner, but that has not been communicated and so the £2,000 incentive [for employers taking on apprentices] is likely to be welcomed by many of those who would have taken on an apprentice anyway, but it is not enough to really incentivise the taking on of learners for those who weren’t intending to,” he said.
Mr Perkins added: “It is one thing for a government minister to announce they are allocating funding, but that is not the same as actually spending it. This government seems to be very good at allocating lots of money that will never actually lead to new opportunities for young people on the ground.”
He said the apprenticeship system and the levy needed to be reformed to ensure that they offered opportunities for young people and those at lower levels.
He said: “It is clear to me that the apprenticeship levy requires reform. In its current form it is too inflexible and it is driving businesses away from level 2 and 3 apprenticeships and it has shut too many SMEs out of the story. The system is currently denying too many young people the opportunities they deserve.
“A coordinated response to Covid-19 would need to ensure that incentives really attract employers to make hiring decisions, that the levy expands rather than retracts opportunities so we have greater clarity and that the FE sector is funded in real times to enable colleges to survive the storms of the last few months.”
Simon Ashworth, chief policy officer at AELP, said members did not want to see fundamental reform of the levy, but were instead looking for smaller changes to be made.
