THE BLOG

The Autumn Statement Provided a Boost for Apprenticeships... But Industry Must Now Take Up the Baton and Run With It

05/12/2014 15:47 GMT | Updated 04/02/2015 10:59 GMT

The Chancellor's Autumn Statement sparked a grand level of debate and, as ever, divided opinion.

Stamp Duty has grabbed most headlines, with the reforms in the levy being charged at different levels of house price attracting a lion's share of the discussion.

George Osborne also made various provisions for small and start-up businesses in the UK, all attempts to boost entrepreneurs and accelerate the continuing recovery.

Whilst all debate around how impactful these elements will be is valid, for me one of the brightest elements to the Chancellor's 'mini-budget' concerned apprenticeships.

According to the Government, almost two million apprenticeships have been taken up since 2010, and George Osborne has now revealed that the Treasury will provide help to businesses creating skilled jobs through apprenticeships, especially young apprentices under the age of 25. At present, businesses that employ apprentices are charged National Insurance. Under the plans set out in the Autumn Statement, this will now be abolished.

Mr Osborne said: "When a business is giving a young person a chance in life, we're going to support them not tax them."

Clearly the smaller the business the more important this concession - hence the move has been seen as a boost to small businesses in particular.

Earlier this autumn, The 5% Club campaign commissioned a YouGov survey specifically to explore the attitudes and intentions around apprenticeships held by decision makers at Small and Medium Size Enterprises across the land.

The top-line results were extremely encouraging.

It identified that three-quarters of small to medium-sized enterprises believe that apprentices are important to future of their businesses. In addition, 40% of respondents believe they have a core role to play in upskilling Britain's youth.

However, the poll also revealed that only one in five SMEs plan to recruit more apprentices or graduates in the next 12 months. For those of us who care deeply about this issue - including all of us in The 5% Club - this seemed like an opportunity being sorely missed.

Given the vital role that SMEs play in sustaining the UK economic recovery - accounting for 99.9% of private business and employing 14.4 million people - the contribution of SMEs is equally essential in tackling the unemployment and skills shortages conundrum in Britain.

Currently three quarters of a million young people in this country are without a job. Yet, at the same time, the UK needs to be able to upskill the young workforce in order to compete globally.

Digging a little further, the YouGov poll discovered some of the elements thought by SMEs to be a barrier to hiring new apprentices.

One part of this was cash-flow, with 30% saying funds were an issue when it came to recruiting apprentices and graduates, and 42% of surveyed SMEs acknowledging that they need to do more to create opportunities.

The 5% Club has always maintained that government is doing a good job when it comes to promotion of apprenticeships and graduate training programmes. The campaign launched with one goal in mind - to call upon industry to commit to a 5% target for apprentices and graduates in their workforces within five years.

It would appear, with the removal of the business tax for apprentices, that even more is being done fiscally.

Only individual businesses, including those launching start-ups or running an SME, truly know how impactful the removal of NI contributions for young people in its workforce will be.

The reaction so far seems to have been very positive.

But the move certainly puts the onus increasingly onto industry.

In removing the tax burden on businesses which create apprenticeships in the way he has, the Chancellor has backed those employers who are supporting Britain's young people.

Since the launch of The 5% Club in October 2013, more and more companies have signed up with us to agree to the 5% pledge. Having launched with six companies and backed by the CBI, the Club now has just over 50 companies or organisations that are proud to call themselves members.

They range from SMEs to FTSE100 and 250-listed companies, but all have one goal - to take on more apprentices and graduates in order to help upskill Britain's youth and help this country compete globally.

Never before has the call for more and more employers to begin to play their part in boosting levels of graduates and apprenticeships been more appropriate.

Growth in the UK is outstripping all of Europe - even Germany; but how many of our young people are not participating in this upsurge? The next set of unemployment figures, due out in mid-December, will no doubt show that youth unemployment has dropped, but not significantly.

It is time for employers of all sizes to rise to the challenge and play their part by increasing their recruitment of young people and providing them with the training to build both a career and the UK's strength.

We, as industrialists, are the ones who must provide the demand-side 'pull' to transform our national capabilities and thus, the prospects of Britain's youth.

The baton has been extended. It is time for more business leaders to seize it.

Leo Quinn is CEO of security and defence firm QinetiQ, a founder member of The 5% Club, the industry-led campaign to raise numbers of apprentices and graduates in UK business.