Government must turbo-charge recovery schemes

IT’S easy to despair at the current state of the economy, particularly when it comes to unemployment. Every day seems to bring more job cuts as Covid hits businesses. Particularly distressing is the impact on the young, who tend to work in the worst-affected sectors - restaurants, hotels, shops, travel.

Given that it now looks like many of those businesses will be a long time recovering - if ever - we must focus on reskilling their younger staff.

We say this after every recession, but we always fail. It’s not just us, by the way. The International Labour Office found after 2008, all advanced economies failed to invest in retraining. Of the stimulus packages pushed through by governments then, only 11.7% went on retraining; 26% went on tax cuts. Tax cuts are useful for companies’ cashflows post-crisis, but we should try to do better this time on skills, too.

The government has tried with its half-hearted Kickstarter basic training scheme. This week it emerged only 2000 people have signed up.

My guess is that employers don’t have enough time to understand and implement such new projects and ideas. Far better, then, to expand existing programmes, which employers are used to.

Step forward, the Apprentice Scheme. After teething problems, this is now delivering upwards of 300,000 apprenticeships a year, with employers choosing where to deploy them. Rather than roll out another new set of projects to grab one-day headlines, let’s turbo charge this one now.

The government currently offers a paltry £1500-£2000 dowry per apprentice for employers to use it. Why not increase that to £4100 - the amount the Treasury saves in unemployment benefits per person, to encourage takeup? Perhaps we can use the short term pain of Covid to create long-term gains and satisfying careers for our children.