Real opportunity or just a stop-gap?

Chris Wright
Thursday, July 9, 2020

800,000 young people will leave education this year and I don’t envy them.

In the cold light of the Covid-19 world, their options are worryingly limited. The announcement by the Chancellor on Tuesday offers some hope but it also raises questions.

One option for young people is to stay on in education – if they can afford it. Others will want, and need, to apply for paid work; but opportunities will be few and far between. Some might apply for apprenticeships; a proven way to get on-the-job experience while building skills, and one which the government has shown its support for.

Others will opt to take up some form of training, with the hope it will lead to paid employment in the not too distant future. The Chancellor has backed this in the form of subsidised six-month work placements for people on Universal Credit aged between 16 and 24.

But we know know that many young people who may be entitled to Universal Credit don’t claim it, meaning they’re likely to fall off the radar. And while building skills and getting job-ready is important, how will these opportunities translate into sustained, quality jobs? What will the quality of these placements be? How will these young people live on the minimum wage – and what guarantees are there that employers will top up the wages to the living wage?

  • Make the most of what’s already in place

A £2 billion investment is considerable. What other options could be looked at that incentivise employers to take on young people, particularly those from vulnerable backgrounds, without costing the Treasury even more?

In 2019, there was a nearly £2 billion underspend from the apprenticeship levy. That’s a lot of money that employers are wasting and which is going back to the Treasury. So how could the levy be flexed to benefit young people?

  • Focus the levy on young people

By allowing employers to spend up to a certain amount of their levy pot on something other than skills and training, ‘off the job costs’ such as recruitment or the salary of an apprenticeship manager could be covered.

Pre-employment training costs, supporting young, inexperienced participants into apprenticeships, could also be covered. Our Digital Edge programme, funded by Microsoft, is a great example - in just 4 weeks we equip disadvantaged young people to enter digital apprenticeships.

  • Incentivise levy transfer 

Many non-levy paying organisations (for example, small and medium enterprises) are not benefitting from levy transfers and therefore are not hiring apprentices. At the same time, many larger organisations are not transferring unspent levy - either because they are unaware of which organisations are interested in receiving the funds, or because of the bureaucracy involved. Far more needs to be done to make these links, such as London Progression Collaboration’s ‘Reskilling the economy’ campaign.

  • Mobilising young people

There is growing momentum around the idea of mobilising young people and equipping them with the skills to contribute to their local communities in a meaningful way, a little like the National Citizen Service. Such ideas would see government provide money to employers to subsidise the wages of young people. The young person would gain work experience and be positively contributing to society, before entering sustained work.

  • Bigger and bolder

This is a big intervention – and we know similar interventions have worked well in the past. But there is a risk that the impact is limited and time-bound. There is a reliance on employers to ‘top up’ wages and to ensure the work is a step on a career ladder, not just a short-term placement.

Let’s back young people now into the careers of the future – because we know it’ll bring returns for all of us as we head for a greener, more creative and technologically-driven economy

Chris Wright is chief executive of social business Catch 22

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