Monday 22nd January 2018

Stimulating demand for 16-18 year olds in Apprenticeships

With the recent announcement that only 15% of current apprenticeship enrolments have been 16-18 year olds, since the start of the Apprenticeship Levy, the focus on how we give this age range new Apprenticeship opportunities is one that needs to be addressed imminently. Our experience at 3aaa of successfully delivering Apprenticeships to over 10,000 16-24 year olds gives us a strong voice on behalf of all of our employers and Apprentices.

With the continued decline in Apprenticeships starts, there is no doubt that the Department of Education are monitoring this closely and we should expect to see some intervention and indeed incentives to encourage organisations to recruit younger people into Apprenticeship roles. This needs to happen quickly and be promoted loud and clear.

At 3aaa, we predict that a range of incentives will be offered by Government for Levy payers to recruit 16-18 year olds. A pick and mix option offering solutions for employers of different sizes would enable the smaller employers to benefit as well as the larger corporates. Our suggestions for the Department of Education:

Wage Cost Support: There needs to be an incentive to encourage employers to use an element of their Levy for 16-18 year olds and allow use of an element of the Levy to support wage costs in this limited area for a specific period of time (6 months).

Financial Incentives for Micro and SME employers: Under the pre-Levy funding regime, which was in place until April last year, financial incentives offered by the Government for taking on a 16-18 year old Apprentice were worth up to £5,400 per Apprentice. This incentive fell to just £1,000 per Apprentice from May last year, causing a complete change around in the provision. Many of these employers were able to use these incentives to provide support in the workplace for young people and ensure that their Apprenticeship offered exactly the type of dynamic earn and learn opportunity that so many young people are seeking. Re-introducing these incentives will stimulate demand and keep the focus on 16-18 year olds.

Bursaries for 16-18 year olds: The House of Commons library has some excellent briefing papers, offering research and summaries of key issues for MPs and Civil Servants to use for effective Government. I often browse through those relevant to training and learning and came across one recently about NEET (Young people Not in Education, Employment or Training). With almost 800,000 young people in this group across the UK, we still need to do more to encourage and support 16-24 year olds into their first jobs. Bursaries are available for young people in full time education and it is time that this was extended formally to those following an Apprenticeship route. Small bursaries that help with travel and lunches can make all the difference to whether a 16-year old follows an Apprenticeship route. Yes, they will be paid, but unless the job is on their doorstep, the cost of travelling to and from work can sometimes be a reason for not being able to start in the first place.

Financial awards for following an Apprenticeship in sectors of the economy where demand is greatest: We are all aware that the digital world is developing daily and the use of technology will transform our lives in ways that we cannot yet imagine. Who’d have thought that driverless cars, mobile phones that run our lives and buying anything at all over the internet without the need for a shop, would be normal only a few years ago? I believe strongly that we should offer financial incentives to young people so that they choose Apprenticeships in areas such as Technology, not only to help our economy develop and grow but also to demonstrate to young people and more critically their parents that Apprenticeships are an even better route than following a degree! An award of something relatively small such as £3k to an 18-year old starting an Apprenticeship in Software Development, would give a much greater return to the economy than a 3-year degree with all the associated costs!

Employer National Insurance Contributions: To encourage businesses to employ young people, the Government abolished Employer National Insurance Contributions for those aged under 21 in April 2015. They were abolished for apprentices aged under 25 on earnings up to the upper earnings limit from April 2016. This incentive must also continue, to encourage employers to take on young people.

It is vital for the future of Apprenticeships that the correct intervention is put into place and that employers and young people themselves are offered some form of incentives and rewards. It is equally as vital that we offer our next generation of talented employees as many options as possible and ensure that they have the platform to excel themselves and start their career journeys.

By offering these incentives, employers will be more inclined to give the next generation their big chance. We have found from our past experiences within this sector that recruiting 16-18 year olds is the ideal way to form the future pipeline of talented workforces across the country as they can be trained and moulded to meet the needs of each individual employer and the employer’s vision and values can be grown and developed.

To all Levy paying employers the benefits of employing a 16-18 year old are endless and it is vital that we urgently find ways to encourage more to follow an Apprenticeship route. Let’s shout loud and clear and ensure that the UK rises to the top of all OECD countries with the numbers of 16-18 year olds following an Apprenticeship route. It will be interesting to see what measures are put into place over the coming months…

Di McEvoy-Robinson – Director – 3aaa Ltd.

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