Give benefits cash to small businesses for apprenticeships

· Move would put some of London’s 32,000 young welfare claimants into paid training – nationally over 300,000 under-25s could be helped
· On the eve of the latest unemployment figures, new projections show £908m of welfare cash could be freed up for apprenticeships

Benefits cash should be diverted to pay for new apprenticeships rather than keeping people on the dole, according to GLA Conservatives’ London Assembly Member Andrew Boff.

Under the proposals, if a suitable apprenticeship exists, a job seeker under the age of 25 would be required to apply when they start receiving unemployment benefits. If they are successful but turn down the position, or quit early, they would lose their benefits.

New figures show there are 32,230 young people claiming Job Seeker’s Allowance (JSA) in London¹, totalling a benefits bill of up to £95m each year². Adopting the proposal across the UK could help the country’s 307,670 under-25s claiming the benefit¹, which is currently projected to cost taxpayers up to £908m this year alone³.

Andrew Boff, GLA Conservatives London Assembly Member, said:

“If you’re about to enter the world of work, apprenticeships give you the opportunity to learn valuable skills, and begin a career, whilst earning money. Sadly, too many of our young people are out of work and risk becoming trapped on benefits. Taxpayers are currently forking out £95m for unemployed young Londoners on Job Seeker’s Allowance, and this is only a fraction of the total JSA bill. That’s why I’m calling for this money to be diverted to small businesses to help pay for apprenticeships in the Capital, which are highly sought after by job seekers. Young people should take the opportunity to learn a trade and stick with it. I do not think it’s unreasonable to give benefit sanctions if someone turns down or drops out of suitable paid training. The Mayor has committed to setting aside £1.5m to help London-based SMEs take on apprentices. Imagine if we get just half of the 32,000 young JSA claimants off benefits and into apprenticeships, it would free up almost £50m to help fund these opportunities.”

Charlie Mullins, CEO of Pimlico Plumbers, is campaigning for more apprenticeships:

“I’m no politician, but this kind of common sense action is a ‘complete no brainer’, because it addresses youth unemployment and the Capital’s massive skills gap all in one go. I’m 100% behind any initiative that gets young Londoners into skilled work, I’ve been advocating similar ideas for ages, and I’d urge the Mayor to back this to the hilt. 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 and a career for life. There are thousands of businesses across London who with a bit of assistance could be training our next generation of skilled workers.”

Billy Utting, 23, Pimlico Plumber’s youngest heating engineer and former apprentice:

“I was extremely fortunate to land an apprenticeship at Pimlico Plumbers, and after three years I have a great career as a heating engineer. But many of my friends, who would have dearly loved the opportunity I was given, have not been so lucky. If there was more funding going to small businesses to take on apprentices so many more of them would now be in the same position as me. I’m set up for life, and any scheme that makes it easier for young people to get the chance I’ve been given has got to be worth backing.”

Details of the proposals are being set out to the Mayor of London and the Department of Work and Pensions (DWP) on the eve of the latest unemployment figures.

References:
¹ ONS: Official labour market statistics, January 2014: http://www.nomisweb.co.uk/reports/lmp/gor/2013265927/report.aspx#tabwab
² An 18-24 year old on JSA is entitled to £56.80 per week or £2,953.60 per year. £2,953.60 (the annual figure) X 32,230 (the number of young people on JSA in London) = £95.2m
³ An 18-24 year old on JSA is entitled to £56.80 per week or £2,953.60 per year. £2,953.60 (the annual figure) X 307,670 (the number of young people on JSA across the UK) = 908.7m

Notes:
· The Mayor has committed to setting aside £1.5m to help London-based SMEs take on apprentices and there are similar programmes underway across the UK in cities such as Manchester, York and Dundee.