Covid-19 has presented the UK with numerous challenges and while the impact of the pandemic will continue to affect society and our economy for some time, the rate of unemployment is predicted to peak below the level reached after the financial crisis in 2008. According to the Office for Budget Responsibility, it expects unemployment will tip at 6.5 per cent by the end of 2021.

We know that, historically, financial crises have disproportionately affected young people aged between 16 and 25 - mostly school leavers who fall out of the system, and students who do not get that important first step on the career ladder. Therefore, the chancellor’s announcements of further incentives for businesses to take on apprentices is particularly welcome.

We know first-hand that financial support can make all the difference to a business supporting an apprentice. We firmly believe that to maximise the number of businesses supporting apprentices, especially small and medium-sized organisations, there needs to be meaningful advice and support to do so.

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Before Covid-19, the West Midlands’ employment landscape was showing signs of improvement. One key factor was the apprenticeship levy, introduced in 2017. This was designed to increase the number and quality of apprenticeships and to make sure that the training would equip apprentices with the skills that local employers needed. 

The lasting impact of the apprenticeship levy

In summer 2018, the government agreed to an apprenticeship levy transfer fund, the first of its kind in the country, enabling us to work on behalf of large employers that pledge levy funds to donate these to local small and medium-sized enterprises (SMEs). This meant that large employers could donate a portion of their apprenticeship levy funds via the WMCA to the smaller companies that otherwise might struggle to expand and recruit. The funds cover 100 per cent of the apprenticeship training and assessment costs.

This has enabled us to partner with more than 40 levy-paying employers, pledging £21 million, making it one of the largest levy transfer funds in the country. More importantly, this has resulted in supporting more than 1,800 apprentices and 613 SMEs within the region. We know that critical to making this happen was the “brokerage” service offered to smaller businesses to help them understand the commitment and the process. Although the online service and information offered through Apprenticships.gov.uk is excellent, we found that many smaller employers still want to talk through their options.

Converting Kickstart into apprenticeships

Building on this approach and talking to the companies taking on young people through the government’s Kickstart scheme will mean we can build a more robust plan for jobs in the region. We recognise the important role that Kickstart is playing in supporting young people and employers to access valuable work experience through a six-month paid placement. We are working with partners to ensure that we have the right support and incentives to convert as many of these young people into apprenticeships at the conclusion of their Kickstart programme. By capitalising on the existing relationship and the support and advice from gateway organisations, we hope to create thousands more apprenticeship places in SMEs across the West Midlands. 

One of the key ingredients to its success is having the buy-in from employers that stems from understanding the region’s strengths and growth sectors. For the West Midlands, this includes advanced manufacturing, construction, engineering and health and social care. We are also seeing an increasingly healthy digital sector with an enormous range of opportunities including robotics, video game development, cyber security, biometrics, virtual reality and autonomous vehicles.

Understanding the demand within these sectors means we can use the money in the region to deliver effective apprenticeship training for SMEs, helping to boost skills, job opportunities and productivity by supporting more young people and adults of all ages into work. Without this support, these companies would be unable to hire apprentices, and we’d be unable to equip young people and adults with the necessary skills to fuel our economic recovery.  

We have worked with many large organisations, including Lloyds Banking Group, which was one of the first employers to join the scheme, donating £3 million - one of the biggest contributions to date. Thanks to this pledge, Birmingham-based IT recruitment and solutions company Crimson, which has developed an in-house apprenticeship training academy, has benefited enormously: 22 of its 100 staff members are apprentices. They come from a variety of backgrounds, including school leavers, graduates and those opting for a change of career. All the apprentices have been given the opportunity to complete a degree-level IT apprenticeship within three years.

Using apprentices to close skills gaps

Apprenticeships enable organisations to benefit from being able to expand, despite challenges such as Covid-19 and the digital skills gap, as well as offering greater innovation, creativity, fresh perspectives and new approaches to solving problems.

It is also a good opportunity to boost diversity and inclusion within sectors. For example, one apprentice from St Modwen Homes, a British-based property investment and development business with a strong presence in the West Midlands, has valued the opportunity to break into a traditionally male dominated sector with the added incentive of being able to earn and learn at the same time. 

Apprenticeships are essential in enhancing employability, but also helping businesses to grow and sustain their workforce. But for this to happen, we need more employers to pledge their support to SMEs through schemes like the levy transfer, as well as organisations of all sizes recognising and committing to apprenticeships. This includes linking into the government’s Kickstart scheme and, as part of this, we are encouraging employers to take on “Kickstart converters” after six months, offering them either employment or apprenticeship opportunities. 

Here at the WMCA, we have a strong track record of successfully improving employment prospects for residents through this joined-up and collaborative approach. We would like to see this rolled out across the country with each region developing a local strategy where they work with companies of all sizes to identify the skills employers need, both in the short-term and longer-term. This way, regions could provide training, valuable experience and job opportunities tailored to local need while contributing to a national economic recovery.

Julie Nugent is the director of productivity and skills at West Midlands Combined Authority