Ap­pren­tice­ships hold the key to un­lock­ing post-Brexit po­ten­tial

The Daily Telegraph - Business - - Summer Statement: Focus On Business & Economics - RICHARD HARPIN Richard Harpin is chief ex­ec­u­tive of HomeServe

The mea­sures an­nounced by the Gov­ern­ment show its great­est fear: that those cur­rently ben­e­fit­ing from the fur­lough scheme – num­ber­ing over nine mil­lion – will ul­ti­mately find them­selves on the un­em­ploy­ment regis­ter as the scheme ends. Young peo­ple are among the hard­est hit. A stag­ger­ing one third of all 18-24 year-olds have lost jobs or been fur­loughed dur­ing the pan­demic.

The Chan­cel­lor’s plan for jobs an­nounced yes­ter­day is to be wel­comed. But does it go far enough?

As the Gov­ern­ment plots a route back to work for the na­tion, it has re­vis­ited a theme that pol­i­cy­mak­ers have dab­bled with since time im­memo­rial: ap­pren­tice­ships.

Last month, Boris John­son talked about an ap­pren­tice­ship guar­an­tee for ev­ery young per­son in the coun­try.

This is a rad­i­cal and wel­come am­bi­tion. With it, the Gov­ern­ment recog­nises that be­hind the un­em­ploy­ment fig­ures is a skills cri­sis.

My com­pany, HomeServe, has a priv­i­leged win­dow on to skilled trades. We own the largest on­line plat­form for trades­peo­ple in the UK: Check­a­trade.

As we be­gin to emerge from the Covid-19 pan­demic, there has been a surge in de­mand for home im­prove­ments. A re­cent Check­a­trade poll showed that over half of the peo­ple sur­veyed have no­ticed more things wrong in our homes dur­ing lock­down than ever be­fore, and they are plan­ning to spend at least £1,000 each on veg­etable plots, out­door so­cial spa­ces and home of­fices. The big­gest chal­lenge we face is find­ing enough skilled trades­peo­ple to do the work.

The strat­egy of in­creas­ing the num­ber of ap­pren­tice­ships is clearly the right one. Where gov­ern­ments have fallen short be­fore is in the ex­e­cu­tion. For all the fan­fare of Ge­orge Os­borne’s ap­pren­tice­ship push in 2015, the num­ber of young peo­ple em­bark­ing on an ap­pren­tice­ship has fallen by over 20pc to be­low 400,000.

The Ap­pren­tice­ship Levy, the tax on large em­ploy­ers to fund new ap­pren­tice­ships, has done a lot to push de­gree-level ap­pren­tice­ships, but has missed the mark on pro­mot­ing skilled work as an al­ter­na­tive route to a univer­sity ed­u­ca­tion.

The mea­sures an­nounced yes­ter­day are a step in the right di­rec­tion. The de­ci­sion to in­crease fi­nan­cial sup­port for ap­pren­tices aged 16-18 from £1,000 to £3,000 is pos­i­tive, with in­cre­men­tal in­cen­tives for other age groups – but it doesn’t go far enough. Our re­search from trades­peo­ple con­firms that the key dis­in­cen­tive to tak­ing on ap­pren­tice­ships is the cost. The thresh­old to get a small busi­ness over the line is closer to £7,000, which would cover around half the cost of the ap­pren­tice in the first year.

Our re­search shows that al­most three quar­ters of trades would con­sider tak­ing on an ap­pren­tice if the Gov­ern­ment pro­vided this level of mean­ing­ful sup­port. It is a small cost for some­thing that could be trans­for­ma­tional in clos­ing the skills gap and help­ing thou­sands of young job­seek­ers kick­start their ca­reers.

Funding could also be di­verted from the Levy, of which a sig­nif­i­cant sum goes un­spent ev­ery year.

Sec­ond on the list of dis­in­cen­tives is the com­plex­ity. For small busi­nesses, ev­ery hour spent on ad­min is an hour of work lost. In an age where we can open a bank ac­count in a mat­ter of min­utes, ap­pren­tice­ship ap­pli­ca­tions can take weeks to com­plete. The process must be much sim­pler.

These two steps could see us add 50,000 SME ap­pren­tice­ships within 12 months, and many more be­yond.

Last month I pro­moted Robert Jud­son to CEO of HomeServe Now, which con­nects cus­tomers to en­gi­neers via an app on their phone.

Rob joined HomeServe straight from school in 2003 on a train­ing scheme in our call cen­tre. His prac­ti­cal ex­pe­ri­ence is in­valu­able to our ex­ec­u­tive com­mit­tee.

Big busi­ness has a role to play. This month HomeServe is launch­ing our own not-for-profit foun­da­tion to en­cour­age other em­ploy­ers in the sec­tor to take on and train more ap­pren­tices to a high stan­dard.

But it is gov­ern­ment that will make the great­est dif­fer­ence.

Ap­pren­tice­ships are one of the keys to un­lock­ing the po­ten­tial of a post-Brexit Bri­tain. It is time for the Gov­ern­ment to fully recog­nise their true value to our fu­ture.

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