Act now, Chancellor, on Apprenticeship Levy to save a lost generation – Justine Greening

Our country has long had an ‘‘opportunity gap’’, with some people able to access more opportunities than others, purely because of circumstance and background.

I know that matters to many Conservative and Opposition MPs too.

Coronavirus has widened the opportunity gap much further, especially for young people.

Children have been out of schools and missing their education for months. It’s welcome that the Prime Minister has signalled he will now bring forward a schools catch up plan, but these aren’t the only young people this Government has to urgently focus on.

A million young people will be leaving the education system this summer and they face entering the bleakest jobs market in many years, even decades.

And among those nine million people who have been furloughed, many of them will also be young people worried that once the scheme winds down next month, there won’t be a job to go back to.

New research by the Social Mobility Pledge shows just how concerned people are about their future prospects.

Nearly half (48 per cent) of those polled in the Yorkshire and Humber region said they were concerned about their own job prospects in the next 12 months.

Overwhelmingly the concerns 
were about redundancy, but 28 per cent were also worried about a salary cut. 

Four out of five people polled nationally expressed concern for the prospects for young people, with three-quarters saying there should be more support for unemployed people than there had been in past recessions. 

People appreciate that the unprecedented challenges of this pandemic puts Government Ministers under pressure.

Even in normal times, there are always pressing issues to fix that suddenly arise. But I know from my years spent as a Cabinet Minister that whatever the political weather, the smartest approach is to come up with solutions so you can get ahead of problems before they land on your doorstep in the first place.

That’s why Ministers must take immediate steps to help young people, otherwise the opportunity gap will become a chasm.

The Chancellor, Rishi Sunak, said he would do ‘‘whatever it takes’’ to protect households and businesses during the coronavirus crisis.

The country now needs that same ambition to help the million young people who will be entering the jobs market as early as next month.

One simple but powerful change would be to announce an immediate change to our bureaucratic apprenticeship rules. Apprenticeships mean that young people can earn whilst they learn, and can be a great pathway to a career. Last year more than 47,000 people in this region started apprenticeships, with nearly 390,000 apprenticeship starts across England.

Now many employers are having to cut back or stop their apprenticeship schemes at the very time they could be a career lifeline for so many.

The apprenticeship levy is the cash that larger companies must ring fence by law to invest in training for apprenticeships.

Government rules say it can only be spent on the relevant courses and fees, but not on the salaries of apprentices themselves. Normally employers can afford that extra apprentice salary cost, but the bleak economic outlook means that’s now much harder.

And it’s impossible for some businesses facing no choice but to cut costs to survive. Yet disrupting their talent pipeline is bad for them and bad for Britain’s economy – short and long term. If the Government made a simple, immediate change of allowing employers to use the levy to fund apprenticeship salaries, it would hugely help businesses to protect those apprenticeship opportunities. More flexibility allowing the levy to help retrain workers for new jobs could also make sense.

But Ministers should go much further than this, match funding the apprenticeship levy so there is double or triple the investment available for employers to invest in apprenticeships.

Then, far from cutting them, many businesses, including SMEs, would be able to significantly scale up the numbers of apprentice opportunities at a time when that could make a real difference. 

Time is of the essence and decisions must be made urgently. This sort of scaling up won’t happen overnight. Employers would normally be recruiting their next apprentices right now.

They need clarity from Ministers today, not weeks later in the summer. Making changes too late wastes the few vital weeks left before autumn that further education colleges and training providers also need to be able to recruit and plan ahead. 

The earliest Treasury announcements aren’t coming until mid-July. A full Budget is not planned until the autumn. This will be too late. The chance to prevent hundreds of thousands of young people ending up unnecessarily unemployed will have been lost. A cost to all of us, and surely most of all to them, unable to contribute the talent they undoubtedly have to our country and rebuilding our economy.

In Rishi Sunak, Yorkshire has a Chancellor representing a local constituency in a region that knows from the 1980s what the blight of mass unemployment means for communities and families.

I hope that he may read this column and act decisively next week on a simple measure that can help support opportunities for young people.

Justine Greening is a former Education Secretary. She was born in Rotherham.

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