Government apprentice guarantee: Funding needed now says IMI

Published:  09 June, 2020

 Garages could see apprenticeship funding increase as the government looks to offset the risk of high youth unemployment resulting from the impact of COVID-19, but the IMI says that an apprentice guarantee will only work if employers get the funding now.

At the daily Downing Street briefing last Wednesday (27 May), Prime Minister Boris Johnson promised an apprenticeship for every young person. He said that the government was looking to invest in skills and training to prevent a wave of unemployment among the under-25s. “In dealing with the fallout of coronavirus, we will be as activist and interventionist as we have been during the lockdown. Young people, I believe, should be guaranteed an apprenticeship.”

Responding to the surprise promise, IMI CEO Steve Nash urged the government to get the funding to businesses as soon as possible: “The announcement from the Prime Minister is tremendously positive for the future of apprentices. We know more detail is to come later this month and in July, but we sincerely hope that the impact of COVID-19 on current and future apprentice recruitment plans is fully understood.

“In the automotive retail sector, the pause button has been hit hard on apprenticeship recruitment as our on-going research has identified. 71% of employers stated that the likely number apprentices will fall in 2020 compared to 2019, and a  drop of as much as 65% is expected in the number of apprentices recruited this year. The planned numbers are now only a third of 2019 levels.

“Only 9% said their apprentice recruitment plans will not change as a result of COVID-19, and training providers are also predicting a fall of on average 38% in their intake for 2020/21 compared to 2019/20.

“With such a sharp drop in apprentice employment and recruitment, larger employers anticipate that their unused Levy funds will be taken back by government. This will create a dearth of funding just as the sector will be emerging from the COVID-19 downturn.

“Last month I therefore wrote to Gillian Keegan, MP, Parliamentary Under-Secretary of State for Apprenticeships & Skills requesting that the current clawback applied to unused Apprenticeship Levy funds is halted for a two-year period.  I am currently awaiting a reply.

Steve added: “We hope government takes heed of the fact that 71% of employer respondents to our research agree that a pause on the Apprentice Levy clawback would improve their prospects of employing apprentices. That has to be a key factor to support the Prime Minister’s worthy ambition.”

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