Autumn statement puts the apprenticeship scheme at risk

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Chris Jones, Chief Executive, City & Guilds Group said: “Apprenticeships have come so far over the past few years thanks to Government investment, support and focus. It’s fantastic to hear in the Autumn Statement that a budget surplus is in sight and that all the indicators point to growth in the UK economy.

“In 2012, we conducted research which showed the correlation between apprenticeships and economic growth. It showed that by creating a million apprenticeships by 2013, £4.37 billion would be added to UK business by 2020. I don’t think it is a stretch to say we are starting to see some of that play out and today’s announcement that an additional 20,000 higher apprenticeships will be created is welcome news.

“However, although it isn’t the intention, today’s Autumn Statement puts the apprenticeship system at risk.

“It’s not the focus on employer ownership that’s risky – that’s something we actually welcome. It’s the assumption that employers have the time – and indeed the will – to cope with the additional bureaucracy these reforms will entail. Rather than incentivising employers, I fear they’ll be put off by what’s been announced and decide it is simply not worth the hassle. That would be a disaster, and another generation of young people in this country would lose out.

“All employers, regardless of size, will feel the effects. The reforms will require additional resource. There will be even more hoops to jump through to establish an apprenticeship. Where is the incentive there?

“Employers should certainly be in the driving seat for apprenticeships. But without enough involvement from educators and awarding organisations, the road ahead is bumpy.

“We cannot afford to let this happen. We know that apprenticeships are core to filling skills gaps. We know that for many, they are that first step towards a career. I hope that we will be able to work with Government to find a flexible, workable solution which gives employers control but also support.”

Ann Pickering, O2’s HR Director, comments: “It’s fantastic to see initiatives to support our young people into work featuring so prominently in today’s Autumn Statement. Rightly so – as our most digitally literate citizens young people can play a central role in helping the sustain our economic recovery, which is being driven in part by the digital economy.  By giving businesses who hire under-21s a tax break, and making more funding available for apprenticeships and young entrepreneurs, the Government has today made a firm commitment to support young people – and that I welcome.

“However, the onus can’t be on Government alone.  If we are to tackle youth unemployment we need a collaborative effort.  All businesses, big and small, need to play their part in making these initiatives a successful pathway for young people to take their first step on the career ladder. Young people have the potential to help ensure Britain continues to grow in 2014 and beyond; businesses need to recognise that this is in their best interests too.”

Nigel Heap, Managing Director of Hays UK & Ireland, said: “The apprenticeship scheme announced by the Chancellor shows he is serious about reforming Britain’s education system to ensure it delivers the skills businesses need. But government needs to ensure it encourages students to learn the right skills. This means reducing or even scrapping university tuition fees to end the chronic shortage of graduates in STEM subjects in the UK.

“In this country, there are 2.5m people unemployed at the same time as there are 1m unfilled vacancies. This is one of the worst talent mismatches in Europe. It’s essential the government acts decisively to incentivise the study of key subjects to ensure the UK’s workforce has the skills it needs to attract investment for years to come.

The removal of employer National Insurance contributions for under 21s will allow businesses, particularly SMEs, to invest in growing their workforces. SMEs provide six in ten private sector jobs and are essential to the health of the UK’s labour market. Reducing the financial risks they take when bringing in new staff will create new opportunities for thousands of people currently looking for employment.

“Businesses in the UK have been struggling under a growing regulatory burden in recent years, which for many has made it impossible to create new jobs. Cutting National Insurance will go some way to redressing the balance, but the government must continue to implement changes to employment regulation to make it easier for businesses to hire new people and thus create employment opportunities.”

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