Andrew Boff is Leader of the Conservative Group on the London Assembly
Benefits reform is likely to be one of the dividing lines for the 2015 election. In particular how do we make better use of the cash that we are spending as country on supporting young people are not economically active. The continuing fall in unemployment that we saw last week is very welcome news, but in London alone, there are still 33,200 young people claiming Job Seekers Allowance (JSA). Almost 5,000 of these have been looking for work for over 12 months and are at real risk of developing long term benefit dependency. At the same time, there is a huge demand for apprenticeships.
Figures from last year show that there was an average of 11 applicants for each apprenticeship vacancy.
Clearly people want them. Apprenticeships offer young people the chance to gain invaluable work experience over a decent period of time, whilst also gaining a real qualification at the end. Under Labour there was an obsession with trying to get as many young people to attend university regardless of whether that was the right course of action for them as individuals. As a result the tradition of learning a trade was devalued. Instead of paying for a qualification at university, apprentices are paid to work and learn.
Moreover, employers are still reporting a dearth of applicants with the right skills for the vacancies they need to fill. With a bit of creative thinking, we can take steps towards solving these three problems in a joined up way, taking young people off the dole and setting them up for life.
One way this can be done is by diverting the money spent on young people’s JSA to small firms who want to, but are struggling financially, to take on apprentices. Under this proposal, all JSA claimants would be offered a suitable apprenticeship as soon as they sign on. If they are offered, but turn down the position, or quit before the training is finished, they would risk losing their unemployment benefits. The money which is saved by moving the job seeker off JSA into paid training – about £3,000 per year, per person – would be available to small businesses that want to offer apprenticeships, but are currently unable to because of the costs involved.
It’s not unreasonable to give benefit sanctions if someone turns down or drops out of suitable paid training. It makes absolutely no sense at all to have young people going nowhere on benefits when they could be learning a trade that will give them purpose, a trade and a career for life.
If this policy were enacted in London, it would be a fantastic way of providing additional money for a hugely successful Mayoral programme. £1.5m is available from the Growing Places Fund to help London-based SMEs take on apprentices. The scheme has been hugely oversubscribed, indicating the real deterrent of high costs in London which are putting firms off taking on apprentices. More money for this scheme will mean more apprenticeship opportunities in London. There are similar programmes across the country which could benefit from additional funding, such as the apprenticeship grants available through Birmingham’s City Deal, or Dundee’s drive to create more modern apprenticeships.
Imagine if we get just half of the Capital’s 33,200 young JSA claimants off benefits and into apprenticeships, it would free up hundreds of millions of pounds to help fund these opportunities, getting our youngsters out of the job centre and into the workplace.