We need to avoid a fiasco of schemes like Train to Gain when rolling out the Covid-19 jobs and skills rescue plan, writes Tom Bewick
The Chancellor of Exchequer has announced the latest coronavirus jobs plan. Like the ambitious furlough scheme, the Treasury is willing to pledge big interventions to help stave off a potential tsunami of employee layoffs and mass unemployment. As reported in this paper, the measures include a complex interplay of wage subsidies for young people, bonuses for taking on apprentices and additional careers support.
While these measures are hugely welcome given the scale of the economic crisis that the country faces, we still need to get the execution right. Equally, the government needs to remember some of the lessons of the recent past when it comes to the design and implementation of any demand-side interventions in the labour market.
For example, it’s been a decade since the House of Commons Public Accounts Committee (PAC) passed judgement on the Treasury inspired Train to Gain programme. It was a scheme devised to get employers investing in their workers with generous public subsidy of over £850 million per annum.
Eligibility rules were relaxed to the point where a massive overspend opened up, with subsequent evaluations finding the training delivered of dubious quality. The PAC report made it clear: the government should “focus expenditure on training with the most benefits, in sectors with the highest needs, and with providers who provide good quality training”.
The question a lot of sector leaders are asking is will quality be placed at the heart of this jobs rescue plan? Will we learn the lessons of Train to Gain and look to minimise so-called deadweight effects and only let our best providers participate? How do we ensure learning is accredited and leads to qualifications that are valued and have on-going currency?
One of the many challenges of the latest Treasury scheme is the potential perverse effects of the various measures that have been announced. The total grant available to an employer keeping a 24-year-old in work is £6,500. This is twice as much as the support available for an apprenticeship. In cash terms, there is even less public subsidy for under 19-year-olds, notwithstanding the different minimum wage rates. From an employer perspective it adds up to yet more complexity, whereas the furlough scheme was stunningly simple in both its design and execution.
The Department for Education needs to get out on the front foot and explain the “offer” to firms in plain English. When I worked on Labour’s New Deal programme in 1997, we funded a multi-million TV advertising campaign explaining the different ways in which employers could support the programme. It proved extremely successful in nearly eradicating long-term youth unemployment.
The most important lesson is to ensure we link coronavirus jobs support to quality training. The experience of the 1980s and make-work schemes demonstrated that too often government was merely providing a gangplank to the dole. Unscrupulous employers engaged in the revolving door-syndrome where young people were laid off after 6 months, only for a new cohort to be taken on. It was the era of jobs without training and training without jobs. This generation of sector experts and labour market planners have the opportunity to rise to the challenge and get the Sunak plan right.