What the chancellor’s summer statement promised for FE and skills

Response to COVID-19 Employment Recovery

An article written by Billy Camden of FE Week provides the perfect summary of the government’s “plan for jobs” to tackle unemployment post-Covid-19. You can read the full article here

The statement included a number of funding boosts and new policies for apprentices and skills, ranging from employer cash incentives to a third year of education to school and college leavers. HOP is working hard to develop an Employment Recovery Hub, which will be launched in July, providing a clear roadmap of how our employers, residents and students can access this support locally. 

The key points are:

1. Cash incentives for employers to hire new apprentices

Sunak announced a “brand new bonus” for employers to hire apprentices over the next six months.

From August 2020 to January 2021, any firm that hires a new young apprentice aged 16 to 24 will receive £2,000, while those that hire new apprentices aged 25 and over will be paid £1,500.

These payments will be in addition to the existing £1,000 incentive the government already provides for new 16 to 18 year-old apprentices, and those aged under 25 with an education, health and care plan where that applies.

It means that employers could receive up to £3,000 for hiring 16 to 18 year old apprentices during the six month incentive scheme.

2. £2bn ‘kickstart’ programme

The chancellor said the government will introduce an “initial” new £2 billion “kickstart” fund to create “hundreds of thousands of high quality” six-month work placements aimed at those aged 16 to 24 who are on Universal Credit and are deemed to be at risk of long-term unemployment.

Funding, which will cover 100 per cent of the relevant national minimum wage by age group for a minimum of 25 hours a week, will be conditional on the firm proving these jobs are “new”.

If employers meet these conditions “we will pay young people’s wages for six months plus an amount to cover overheads”, Sunak said. That means for a 24 year old the grant will be around £6,500, he added.

There will be no cap on the number of placements and the scheme will be open to funding applications from August 2020, with the first jobs are expected to begin in the autumn.

However, young people taking part in the programme cannot also be apprentices (click here for full story).

3. £111m boost for ‘proven’ traineeships

Sunak confirmed the government will provide an additional £111 million this year for traineeships in England, in a bid to triple participation in the “proven” programme.

Incentives of £1,000 per trainee will be paid, and eligibility for traineeships will be expanded to those with level 3 qualifications and below.

A Treasury spokesperson told FE Week the £1,000 bonus will be limited to 10 trainees per employer and the budget increase will also pay for a 55 percent increase in the training provider payment for 19 to 24-year-olds from £970 to £1,500.

There were just 14,900 starts on traineeships last year.

4. £101m for school and college leavers to return for a third year

The chancellor pledged £101 million to give all 18 to 19 year olds who are struggling to find work in England the “opportunity” to study “targeted high value level 2 and 3 courses” throughout 2020-21.

FE Week has asked Treasury for further details but the Department for Education explained it will involve offering school and college leavers that are at risk of becoming NEET an additional optional paid extra year in education.

A full list of qualifications available for the fund will be published in due course but it is expected to apply to A-levels in science, technology, English and maths, as well as qualifications in ICT and construction, for example.

5. £32m for the National Careers Service

The government will provide an additional £32 million funding over the next two years for the National Careers Service so that 269,000 more people in England can receive “personalised advice on training and work”.

6. Tripling of sector-based work academies

Sunak said £17 million will be made available to “triple the number of sector-based work academy placements in 2020-21”.

The scheme, run by the Department for Work and Pensions, typically lasts for up to six weeks and includes pre-employment training, a work experience placement, and a “guaranteed” job interview.

The Treasury said the funding boost will enable sector-based work academies to provide “vocational training and guaranteed interviews for more people, helping them gain the skills needed for the jobs available in their local area”.

7. Early release of college capital funding

In his budget last year, Sunak committed to making £1.5 billion available to for college capital projects from 2021.

As previously announced by prime minister Boris Johnson, the government will bring forward £200 million of this to 2020-21 to support colleges to carry out “urgent and essential maintenance projects”.

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