Covid-19: Businesses and the Private Sector

Baroness Falkner of Margravine Excerpts

Thursday 21st May 2020 Lords Chamber

[Baroness Falkner of Margravine (Non-Afl)]

My Lords, we recognise that the health of the private sector will be the key to reducing unemployment, which is projected to peak at around 9%. I want to speak about the impact on the young, in particular those who do not seek the university route to build up their qualifications, but instead look to workplace training such as apprenticeships as the route to employability. We know that Covid-19 has already had a great impact on apprenticeship schemes around the country. According to reports, Covid has forced around 60% of employers to suspend on-the-job learning, to make recruits redundant or, less alarmingly, to furlough them. Apprenticeship schemes at 40% of companies have been suspended due to the lockdown, while in a survey of their current plans, over 30% of employers said that they would either hire fewer apprentices or none at all. This has been exacerbated by the fact that private apprenticeship training providers are going out of business or have already done so, and are therefore unable to provide the training.

It appears that the problem lies with the Department for Education, which is refusing to comply with Cabinet Office guidelines and to continue paying private apprenticeship providers during the lockdown. This matters, as 70% of apprenticeships in England are run by private companies. The inconsistency of the Department for Education is evident, in that it is providing support to FE colleges, as it should, but cannot see the logic of treating apprenticeship training providers in the same way.

For many young people from the most disadvantaged backgrounds, an apprenticeship is one of the few routes into longer-term, sustainable employment, particularly in the technologically advanced sectors. We also know that the disproportionate impact of youth unemployment will hit already disadvantaged northern towns, so it is perverse that, while the Government wish to level up the economy in those areas, departmental silos are preventing that. Will the Minister please ask the Department for Education to redress this anomaly before greater damage is done? Importantly, will he indicate to providers that the problem will be addressed, so that those who are making decisions today know the Government’s intentions before they take irreversible decisions?