The government should set aside an extra £8.6 billion for a one-off skills package to “reboot” the economy post-Covid-19, according to the Association of Employment and Learning Providers.
AELP says a large chunk – £3.6 billion – of the “costed” proposal should be spent on subsidising wages for half a million young apprentices to protect them from redundancy, while most of the rest should go towards tripling the existing annual adult education budget to £4.5 billion.
Mark Dawe, chief executive of the membership organisation, said the country “can’t wait” for government to take six months to come up with entirely new employment and skills programmes and must instead “mostly scale up existing programmes using trusted delivery partners”.
He added that the prime minister’s proposed “apprenticeship guarantee” shouldn’t be dismissed as “unworkable”, but employer sign-up is “essential and this requires a realistic level of wage subsidy during the recovery period”.
Boris Johnson told the nation during a coronavirus briefing last week that young people “should be guaranteed an apprenticeship” after warning of “many, many job losses” expected from the fallout of Covid-19.
The unexpected announcement divided opinion in the FE sector, with some lauding the proposal while others were sceptical about its viability. Labour’s shadow apprenticeships minister Toby Perkins branded it a “deception”.
AELP’s proposals, submitted in advance of the expected July statements from the prime minister and the chancellor on post-pandemic recovery, says the only way to achieve an apprenticeship guarantee would be through a wage subsidy at a level “high enough to persuade the employer to make apprenticeships opportunities available”.
They said this should be offered to apprentices aged 16 to 24, and in “some ways” would be an extension of the principles of the Coronavirus Job Retention Scheme.
“For this to be a guarantee with teeth we think that this subsidy would need to be at least 50 per cent of the apprenticeship salary which might include National Insurance relief,” the AELP said.
“Employers should receive a start payment, a midpoint payment and an achievement payment. We also think this will be most critical for roles at level 2 and level 3.”
To support half a million young apprentices, the subsidy cost would be around £3.6 billion, according to the association. Unless wage subsidy is offered to employers, AELP believes large numbers of apprentices will be made redundant over the next 12 months.
On top of this, the organisation said an additional £1.5 billion needs to be committed for non-levy apprenticeships.
For adult workers, AELP believes that the government should “park” plans for its £3 billion National Skills Fund and £100 million National Retraining Scheme and instead channel the funding mostly into “well-established adult skills programmes”.
The annual adult education budget (AEB) of £1.5 billion “needs increasing to £4.5 billion to help tackle mass unemployment and support vital reskilling for those who have remained in work”.
Training providers have struggled to spend their adult education budget allocations in recent years, but the AELP believes mass unemployment means that there will be a big spike in demand.
The AELP has also today called for an additional £450 million to be invested for 16 to 18 year old programmes, including traineeships.
The organisation wants traineeships to be introduced for adults aged over 25, as well as the development of a new “pre-apprenticeship” programme for young people and adults which “involves a job commitment being offered by an employer from day one”.
Free travel “should also be considered” for 16 to 24 year olds nationally “in respect of apprenticeships and other skills and employment programmes”.
AELP said the £8.6 billion package should be launched as soon as possible, with a review taking place of its effectiveness 12 months later.