Investing in Apprenticeships: A Pragmatic Approach to Youth Employment
The Government is allocating up to £240 million to apprenticeship brokerage via England’s regional mayors, aiming to simplify the process for employers and connect young people with available vacancies. This initiative is well-intentioned, designed to bridge the gap between job seekers and employers, but it raises a critical question: what value does a matching service provide if there are insufficient apprenticeship placements available?
Many young people are eager and ready to start apprenticeships, yet the reality is that firms can only take on a limited number at any given time. For example, despite receiving hundreds of applications from proactive young candidates, some businesses currently accommodate only a handful simultaneously.
Across the UK, nearly one million young people aged 16 to 24 are classified as NEET (not in education, employment, or training). Concurrently, there is a significant demand for skilled trades such as plumbers, electricians, and engineers—sectors crucial to the economy that continue to face workforce shortages.
Alan Milburn’s forthcoming review on youth unemployment and inactivity is highly anticipated. It offers an opportunity to recommend actionable solutions that can make an immediate difference. One such solution is straightforward yet impactful: directly pay employers to take on apprentices.
Insights from Industry Experience
Having founded Pimlico Plumbers with minimal resources—a bag of tools and a second-hand van—I have firsthand experience in developing apprenticeships. Over time, Pimlico Plumbers has created 1,200 apprenticeship opportunities. Training someone with no prior experience into a reliable tradesperson requires significant investment and commitment.
During the initial months of an apprenticeship, the productivity of seasoned employees may temporarily decline as they dedicate time to training. For small businesses, this added cost and reduced output can be a deterrent, often leading to a delay in hiring new apprentices. However, this phase is temporary and yields long-term benefits.
My proposal is to reallocate government funds currently spent on out-of-work benefits for young people into supporting apprenticeship wages and training. Employers would receive payments when they create additional apprenticeship positions and further incentives as apprentices complete their qualifications. This model ensures that young people earn a wage from day one while allowing businesses to invest adequately in their training.
The Broader Economic and Social Impact
At WeFix London, for example, such a scheme would enable the recruitment of many more apprentices to work alongside experienced engineers, expanding capacity and expertise.
From a taxpayer perspective, this strategy makes financial sense. Each year a young person spends unemployed represents lost earnings and missed work experience. Apprenticeships provide skills that enhance employability and earning potential. As apprentices progress and earn more, their tax contributions increase, benefiting public finances.
Moreover, apprentices with skills contribute to business growth, enabling companies to take on more work. Many apprentices eventually start their own businesses and continue the cycle by training future apprentices—amplifying the return on investment.
Success should be measured by tangible outcomes: the number of additional apprenticeships created and the completion rate of apprenticeship programs. Milburn’s review should consider what financial support small businesses need to confidently commit to hiring more apprentices. For many, wage support is the critical factor that tips the balance.
Key Takeaways
- Redirect benefit spending towards wage and training support for employers who create extra apprenticeship places.
- Help small firms cover the early costs of training apprentices and reduced productivity.
- Apprenticeships give young people a wage from day one, skills, and valuable work experience.
- More skilled workers can help businesses take on more work and boost tax contributions.
- Measure success by the extra apprentices hired and the number who complete their training.
For more insights, read the full article Here.
