The government should pay apprentice wages and fund their full cost of training “for at least a year” if they work for a small or medium-sized employer (SME), an influential MP has said.

Robert Halfon, chair of the education select committee and a former skills minister, believes the chancellor’s extra investment for apprentice incentives and kickstart programmes should not have “been given so much to the bigger companies”.

Speaking at today’s Association of Employment and Learning Providers conference, Halfon said it would have been better targeted at smaller firms and went as far as to call for their apprentices’ wages to be funded.

It echoes a policy proposed by Labour, which wants unspent apprenticeship levy funding to subsidise apprentice wages.

Halfon said: “The number of apprenticeship starts has fallen steadily among all age groups since 2015/16, from 509,000 to 323,000 in 2019/20. That’s an overall decline of 37 per cent. This fall was particularly acute for the most disadvantaged young people aged under 25 who fell by 52 per cent.

“So to support SMEs, we should fund 100 per cent of training costs and salary, at least for the first year of an apprenticeship.”

He added that government should “try and ensure” that every person is given an “apprenticeship guarantee” and “strategically weigh the levy in favour of young people, especially those disadvantaged backgrounds to address the rising unemployment figures in this age group”.

Under chancellor Rishi Sunak’s plan for jobs, the government has offered apprentice incentive payments to all employers since August. The cash bonuses for starting new apprentices currently amount to £3,000 for any age at any employer.

And Sunak is also investing £2 billion in kickstart – a wage-subsidy scheme that allows people aged 16 to 24 who are claiming Universal Credit to take newly created six-month work placements with employers, who will also have their overheads covered.

Kickstart grants for employers can total £6,500.


‘Proposals from Halfon and others can make a difference’

Expanding on his call for apprentice wage subsidy for SMEs in a Q&A after his speech, Halfon said: “The money that government has given towards apprenticeships and kickstarter is going to every company whether they’re big or small.

“And I think, they perhaps should not have given so much to the bigger companies and given that money to smaller companies. You’ll be able to give those companies more money than the existing schemes and I think that would have been a bigger incentive for those smaller companies to employ young people and employ apprentices.

“I talked about an apprenticeship guarantee and I think if you gave that incentive to small businesses to do this I think it would make a huge difference. Huge difference. And I suspect that it would be very successful, and they would be able to employ a lot more apprentices than they otherwise might do.”

AELP chief executive Jane Hickie said: “AELP called for wage subsidies early in the pandemic and so we are pleased that the opposition and the education committee chair share similar views.

“We are concerned that young people on kickstart, for example, are not necessarily going to progress on to an apprenticeship and so proposals from Robert Halfon and others can make a difference in giving young people a proper career path instead of a welcome but short-term respite off benefits.”

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