Trapped young jobless need a smarter system

16th December 2011 at 00:00

The tragic milestone of one million unemployed young people was reached shortly after the news of England's staggering rise in apprenticeships. Observing the ministerial backslapping that accompanied this announcement last month, the public could be forgiven for believing that the country's performance was nothing short of gold. Imagine the medal ceremony in Parliament Square: the indefatigable skills minister John Hayes - adorned in laurel leaves - stepping up to the podium to receive his just reward for many years of hard work.

Except, of course, the Government's self-proclaimed achievement in apprenticeships is a mirage. In absolute terms, the number of people starting an apprenticeship has increased by 50 per cent to 442,700. But that is like Soviet-era commissars saying ball-bearing production has increased five-fold thanks to more roubles from Brother Stalin. Meanwhile, the bread queues lengthen and the people starve.

What actually matters is how many of these "starts" in apprenticeships lead to real, high-quality completions, resulting in good, sustainable jobs. Of course, we will not know these figures until Government statisticians publish them this time next year. What we do know is that much of the recent increase has gone to the over-25s. Some could also be 16-week apprenticeships in areas like retail and shelf-stacking. The seasonal recruitment rush before Christmas may just become one more way of employers exploiting the young instead of paying statutory minimum pay.

Perhaps, in the future, the Government should publish the apprenticeship figures in tables that directly compare them with our international competitors' performance. This would soon reveal that, in terms of the number of employers who offer good-quality apprenticeships, Britain comes nearly bottom of the international league. In Australia, more than a third of companies train people as apprentices, with a much higher proportion at technician level: precisely the level that provides good wages and economic growth. In Europe, the majority of advanced economies do the same, including smaller states like Switzerland.

According to analysis from the Institute for Public Policy Research, the German system helps 800,000 young people achieve an apprenticeship, from which 75 per cent go on to gain an advanced-level apprenticeship - a much clearer pathway to higher-level skills or university. Germany has an industrial model of employer leadership and involvement in skills development that leaves the English system of top-down, statist interventions looking dangerously sclerotic.

Revolution or bust

The idea that Britain is experiencing some sort of "apprenticeship revolution" is highly misleading. To trumpet an increase in the quantity of apprentices is to completely miss the real jobs crisis now unfolding. Parallels with the 1980s are apt. During that period, the Conservative government artificially increased the number of training schemes to massage the statistics. It led to what policymakers called the "revolving door" problem of training without jobs.

Moreover, while it is incredibly important for profitable companies like Ferrari, Tesco and BAE Systems to offer apprenticeships, should they be receiving such generous public subsidy at the expense of smaller employers? Economists call this "dead weight": public money being given to companies when they probably would have financed the schemes anyway.

A smarter apprenticeship system would focus the most public subsidy on companies with fewer than 150 employees, in sectors where there is likely to be stronger future jobs growth, rather than perpetuating the revolving door. For example, three years ago apprenticeships did not exist in Britain's highly successful creative industries; the creative sector, combining media with the arts, generates nearly as much gross domestic product as manufacturing. Yet these are precisely the sorts of apprenticeships that are flourishing in the current, harsh economic climate. Nearly 1,000 waged employer-led places have been created from nothing.

According to an independent evaluation of the creative apprenticeships scheme run by sector skills council Creative and Cultural Skills, auditor Baker Tilly concluded that there was hardly any dead weight. The reason for this is apprenticeship subsidy is being better targeted.

Business secretary Vince Cable is right about one thing: apprenticeships are not a "silver bullet" to solve youth unemployment. Yet, his Coalition partners have gone out of their way to dismantle much of the support infrastructure that was beginning to make a dent in an intractable issue. Before it was scrapped, the education maintenance allowance was improving participation rates and attendance in further education.

The job guarantee introduced by the last government helped mitigate the worst effects of long-term youth unemployment. The current Government needs to be more imaginative. A good start would be to mobilise the kind of comprehensive approach that has accompanied the debate about the current financial crisis. Now is not the time for timid and incremental actions, presided over by people who have very little empathy with this scarred generation.

Tom Bewick is chairman of the International Network of Sector Skills Organisations.

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