techUK responds to latest government announcements to expand opportunity for young people
The government has announced further investment aimed at supporting the next generation and tackling the high levels of young people who are not in education, employment or training (NEET). The announcements outlined how existing programmes will be expanded and additional funding will be made available to create more opportunities for 18–24-year-olds.
This includes:
- A new Youth Jobs Grant, which provides businesses with £3,000 for every young person they hire aged 18-24 who has been on Universal Credit and seeking work for six months.
- The expansion of the Jobs Guarantee to a wider age range, from 18-21 to 18-24.
- An Apprenticeship Incentive of £2,000 for each new employee aged 16-24 taken on by an SME.
- Further reforms to the Growth and Skills Levy to prioritise young apprentices and ensure quality, including defunding apprenticeship standards which do not align with national skills priorities
- The launch of an AI and automation practitioner apprenticeship.
These additional announcements are underpinned by an additional £1 billion in funding, taking the total investment in the Youth Guarantee and additional investment in the Growth and Skills Levy to £2.5 billion over the next three years.
techUK response
techUK welcomes announcements which reflect many of the points we made in our responses to the call for evidence for the Milburn Review and the Work and Pensions Committee inquiry into youth employment. In particular, we highlighted that provisions such as the Jobs Guarantee would benefit from being extended to cover 22-24 year olds, considering their likelihood to be NEET, and interventions should account for opportunities in growth sectors like tech.
We also emphasised the impact of rising costs for employers and wider economic challenges – including rising apprenticeship costs, planned changes to the youth rate, increases in National Insurance contributions and other recent employment rights and minimum wage reforms. Our responses argued that any changes should be carefully considered in this context, and accompanied by targeted hiring incentives, wage subsidies and wider reforms to protect youth opportunities.
techUK is therefore pleased to see government implementing plans to expand the Jobs Guarantee scheme and create hiring incentives for young people. However, it must be noted that while short-term subsidies and incentives are needed, they are not long-term solutions. Making a sustained difference for youth opportunity will require a concerted effort to improve business confidence and address rising costs.
The inclusion of higher-level technical skills and AI leadership within the first 7 new apprenticeship units, new short courses funded through the Growth and Skills Levy, is a positive move that reflects their national importance. In addition, as AI-specialist jobs continue to grow, we welcome the creation of a new AI and automation apprenticeship to provide more people with a pathway into careers in AI.
But for Levy reforms to effectively deliver on their potential to boost levels of training and uptake of short courses, and tackle skills gaps across the economy, government will need to maintain adequate funding, support and opportunities for workers of all ages. In addition, government should also create a separate, clearly defined framework for modular, Levy-funded training, such as short courses and micro-credentials, that sits alongside, not inside, the apprenticeship system.
Finally, plans to defund apprenticeships such as those in leadership and management, without alternatives in place, appear short-sighted. If we want more young people to enter and stay in work, ensuring there are effective managers and leaders in those very workplaces is critical. Research by the CMI found that bad line managers will see 50% of those who work under them leave within 12 months. And, in the context of technology adoption, we know that good management practices and effective leadership can often be the difference when translating adoption into improved processes, better products and services, and higher productivity.
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Authors
Jake Wall
Policy Manager, Skills and Future of Work, techUK
Jake has been the Policy Manager for Skills and Future of Work since May 2022, supporting techUK's work to empower the UK to skill, attract and retain the brightest global talent, and prepare for the digital transformations of the future workplace.
Previously, Jake was the Programme Assistant for Policy. He joined techUK in March 2019 and has also worked across the EU Exit, International Trade, and Cloud, Data Analytics and AI programmes.
He also holds an MA in International Relations from the University of Sussex, as well as a BA(Hons) in International Politics from Aberystwyth University. During his time at Aberystwyth University, he won the International Politics Dissertation Prize.
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