QA welcomes the news in the Chancellor's Budget

Spring budget places focus on skills and jobs

The Chancellor’s Spring budget provided good news on many fronts. Now more than ever, it is right that the Government invests in getting people into work and giving individuals and businesses the skills they need to build back better.

Apprenticeship incentive doubled to £3,000

There is no doubt that the youngest members of our workforce have been hit hard by the pandemic. The Centre for Progressive Policy tells us that apprenticeship starts fell by 68% for under 19s and 39% for over 25s during the first wave of the pandemic.

After citing the Kickstart and Restart programmes as proof of commitment to building the skills people need to get jobs, or get better jobs, the Chancellor announced three new initiatives to further target this issue:

• Apprenticeship incentives increased from £1,500 to £3,000 on 1 April 2021.
• New, more flexible approach to apprenticeships in the creative industries no longer dependent on a single employer.
• £126 million to triple the number of traineeships.

Employers are now able to claim £3,000 for any new apprentice joining their organisation, with potential for that to be topped up to £4,000 for apprentices aged 16 to 18, or under 25 with an Education, Health and Care plan. The increased incentive will go a long way to supporting the apprentice’s wages in their first year, making it cost effective to take on a new apprentice, especially with apprenticeship schemes repeatedly delivering increased loyalty and productivity benefits.

Employers concerned that apprentices might struggle without the presence of more experienced staff to support them can now confidently plan for early summer start dates. News of the increased incentive, combined with the fact that training centres can once again open up next month, is the catalyst many organisations needed to move forward with early-careers talent strategies.

By introducing more diverse ways of thinking via apprenticeship programmes, organisations benefit from innovation in products and services. For this reason alone, there is no better time to hire apprentices.

Digital skills to build back better

Recent research by the Centre for Economics and Business Research (Cebr) suggests that accelerated digital adoption could increase UK GDP by approximately £74 billion by 2025.

While the £520 million Help to Grow scheme will undoubtedly help small businesses develop digital skills through training and a 50% discount on new productivity-enhancing software, more is required to help companies of all sizes to build their technical capabilities.

The £138 million set aside to expand skills bootcamps in the 2020 Autumn spending review will start to deliver digital skills in areas of high unemployment and low skills but with unemployment now at 5.1%, collective action is required to prevent that number from increasing, and to create new opportunities for those displaced by Covid and the rapid adoption of digitisation.

Research by enterprises like Microsoft and Salesforce anticipates the creation of millions of new tech jobs over the next three to five years. To fill these jobs, employers will need to reach outside of traditional recruitment pools to attract candidates with the right aptitude and attitude to succeed in tech roles, rather than relying on STEM degrees and proven experience.

The apprenticeship incentive should also encourage employers to be more creative with reskilling candidates with the potential for tech, i.e. broadening the recruitment strategy beyond candidates with computer science degrees.

Furlough provides a unique opportunity to train employees

The furlough extension will come as a welcome relief to individuals and employers alike. For employers, it also provides a window of opportunity to upskill staff not currently working. Employees must be paid the minimum wage while they are undergoing training but if employers can cover the cost of training, wages will be covered – or subsidised – by the Government until the end of September. Now is a good time to identify skills shortages and put in place the training that will drive productivity and close the skills gap.

The Government’s commitment to give every business, large or small, the opportunity to grow, innovate and succeed is laudable. The most important task now is to make sure that the two are linked up: that we support people to build the skills that employers need, and create well paid stable employment for the long term.