Bold action from the Chancellor – but more is needed

The Chancellor’s economic statement, as expected, took bold action to mitigate the impact of Coronavirus. The severity of the problem ahead was brought into sharp focus by the huge sums of money announced, in stark contrast to the modest government spending seen over the last decade. Rishi Sunak spoke clearly, concisely and directly, with a range of measures, clearly centred on job creation.

Such measures are vitally important, particularly for young people, and those leaving full time education in search of their first job. The Kickstart jobs programme, and investment in traineeships will surely go some way to providing opportunities to people who may otherwise have found themselves inactive in a challenging labour market. The success of these initiatives will largely depend on longer term outcomes for the beneficiaries. In other words, will people be able to secure long term employment after the six month subsidies come to an end?

Apprenticeships were expected to be a large part of the package announced. It was only a few weeks ago that hopes were raised by the Prime Minister that we could see an ‘apprenticeship guarantee,’ first proposed by Chair of the Education Select Committee, Robert Halfon MP. The wage subsidies announced felt a long way from that idea, which admittedly may have been too ambitious to implement within the timeframe needed.

The big issue with the apprenticeship wage subsidy, is that the additional funding is less than half of what is available to employers through the Kickstart jobs scheme, which requires a much shorter commitment. It is led by demand from employers, and it remains to be seen whether it will be enough to tempt employers to create apprenticeships, given the other costs involved. Apprenticeship numbers may still plummet despite the subsidy, given the challenges and uncertainty faced by employers.

Ultimately, there was little for the Department for Education, in contrast to the additional funding that will go to the Department for Work and Pensions.

There were gaps in what is likely to be needed to prevent huge numbers of people becoming economically inactive.

There was no mention of adult training, or those changing careers. There will be many adults who have found themselves unemployed and looking to learn new skills, retrain, regain their confidence, and find work in a new industry who may find it difficult to access support.

There was also nothing to help 19-24 year olds who may wish to shield themselves from the competitive job market and improve their skills through full-time learning. Existing entitlements to study or a first full-time level 2 and 3 qualification, or funded learning through a loan are not attractive to young adults without the provision of maintenance funding. This is particularly the case for those who may rely on income through benefits that they would lose when entering full-time study. People must be able to put food on the table.

We must be patient. The Chancellor himself said in his speech, “Our Plan for Jobs will not be the last action – it is merely the next – in our fight to recover and rebuild after coronavirus.”

The Autumn Statement and Comprehensive Spending review is due later this year. This will give the Chancellor an opportunity to see what impact these measures are having, and respond accordingly. We must hope that the government use this opportunity to ensure that education and skills play a much greater role in the country’s recovery. The sector is ready to work with the Government to tackle the enormous task ahead.

Michael Lemin, Senior Policy Specialist at NCFE