Charlie Mullins is the founder and Chief Executive of Pimlico Plumbers.
Britain is facing a ticking time bomb. The true extent of this threat was underlined a fortnight ago in a report from the UK Commission for Employment and Skills stating that a skills shortage could hold back the pace of economic recovery. This looming shortage of skilled labour comes at a time when we have nearly a million young people stuck on the scrapheap and not in employment training or education.
We need to defuse this double threat of firms not being able to get the skilled people they need to grow and young people seeing little chance of getting into a rewarding career because of the damaging effect of long term unemployment at the start of their working life.
I was brought up on a council estate near the Elephant and Castle and left school at the age of 15 without any qualifications. I knew that even though learning at school wasn’t for me, if I had the right attitude there were opportunities for me to get into a trade by learning on the job.
Plumbing seemed to be a trade that offered good money and respect so I started on an apprenticeship. That apprenticeship has given me everything I have now. It gave me the opportunity to learn a trade, get qualifications and eventually build my own business which now employs over 200 people in London.
One of my proudest achievements was growing the business to a size where we could start taking on our own apprentices and we have expanded the scheme as we have grown over the years. Apprentices now make up about 10 per cent of our workforce.
This Government have done a lot for apprenticeships. The number taking them up has increased by 86 per cent since Labour were in charge. This is great news, but the challenge this country faces to get youngsters into work means that a lot more needs to be done.
A recent survey of apprentices from the Industry Apprenticeship Council showed that most found out information about apprenticeships on their own initiative. Very few got any information from teachers or careers advisers and nearly 20 per cent said that their school actively discouraged them from taking an apprenticeship up.
I believe that denying opportunity to young people like this is an absolute scandal. My view is that in the same way that university entry has been promoted to young people through visits and summer schools etc. schools need to work with employers to promote apprenticeships. This should be open to all their pupils, not just those that they have decided are ‘not up to going to Uni’.
As well as schools promoting apprenticeships it is important that business and the Government do their bit to boost apprenticeship supply. Across the country there are 11 applications for each apprenticeship place. This is a higher demand than for places at Oxford and Cambridge University. We want to see a situation where rather than having to turn so many people away; an apprenticeship is available for everyone who wants to take one up.
It is clear that boosting the supply of apprenticeships from SMEs is important if we are going to deliver on this aim, but taking on an apprentice is very expensive for small companies with the cost of wages and the time needed to train them. It is a great investment for the future, but the business is unlikely to get much return in the first couple of years. This is a huge risk if the apprenticeship goes wrong or the apprentice leaves soon after they have finished their training.
This is why I believe that the Government has a role to play. They currently provide a small grant to employers of £1600 for each apprentice under the age of 24. Evidence shows that local schemes to increase support to SMEs on top of this has led to a significant increase in places. I believe that a national scheme to fund apprenticeships is needed to meet the shortfall in places.
A report from the IPPR shows that about £2.5 billion is spent on out-of-work benefits for the under-25s each year. This is a huge amount of taxpayers’ money being invested into actually reducing the life chances of young people as time on benefits knocks back their future earning potential. This money should be reinvested in supporting the expansion of apprenticeships or pre-apprenticeship training schemes. This would be investing in our future rather than subsidising failure.
I am determined to do what I can to give more young people a better chance. Ministers, including George Osborne and the Skills Minister Matt Hancock have recently visited Pimlico to see our apprenticeship scheme for themselves and we recently held a roundtable bringing together skills experts and representatives of business groups to consider how we can work together to boost apprenticeships.
It was clear that, as I like to say, we were all drinking from the same teapot in our belief that more apprenticeships is the answer to defusing the youth skills time bomb. Over the coming months I am going to be working with a range of groups to get politicians to pledge to take action to give young people a chance by boosting apprenticeships.
Delivering on this is not going to be easy but given the extent of the challenge we face, the question should be: can we afford not to take action?