One of the region’s foremost engineers says the growing skills gap will only get worse after the Government announced plans to scrap funding for training providers.
Bill McGawley, who heads up Newcastle-based TDR Group, has criticised the Government’s proposal to divert money away from training providers and give businesses direct control of the funding of their own apprenticeships.
He says the North East’s growing number of SMEs, who do not have the resources to set up their own apprenticeship schemes, will suffer and opportunities to train and employ the future generation of skilled workers will be lost.
Mr McGawley, who is a chartered graduate engineer and was awarded an OBE in 2010 for services to business and skills, said now is the worst possible time to consider revolutionising the system.
“Instead of paying the training providers, the Government has finished consulting on its plans to give businesses control of apprenticeships.
“But right now, we’re busier than ever. We need skilled workers and every company is crying out for the 32-year-old seasoned engineer, but for the last 15 years businesses simply haven’t been investing in training and now we’re in crisis.
“However, this crisis is nothing to what we’re about to feel in the next three to five years.
“Big companies, such as Land Rover Jaguar and Nissan can afford the £60,000 it costs to put an apprentice through three to four years of training. But smaller companies need support from training providers.
“The training of apprentices in this country is 10% from large companies, 15% from colleges, while the balance is delivered by the provider network working with SMEs.
“What’s more, the Government won’t give companies the money the training providers would traditionally have received. Businesses will just be seeing a reduction in their National Insurance contribution.
“There’s no doubt that this is a further cost-cutting method by the Government and a foolish one in the long-term at that.”
TDR is an independent, business and charitable trust that operates primarily in the science-based sectors. The charity works in schools to develop a pool of young people ready to undertake STEM-based careers.
“The Government has also announced a 17.5% cut in funding for learners over 18 years of age,” said Mr McGawley. “This compounded with its plans to completely abolish the funding it provides training providers will result in a decline in demand for apprentices from companies, especially SMEs.
The new apprentice system will be trialled with the ‘Trailblazer’ employers in 2014 to 2015. The first phase of the Trailblazers began in October 2013, with groups of employers, large and small, working together to design new standards for apprenticeships in areas like automotive, aerospace and financial services. Their standards were agreed by the department and published during National Apprenticeship Week 2014.
Skills Minister Matthew Hancock said: “For the first time, a new generation of young people are seeing apprenticeships as the route to a brighter future. Now is the time to reform the apprenticeship system in order to put it at the forefront of economic growth for years to come.
“I also want apprenticeships to become the first choice for businesses and employers of all sizes.
“By driving up the rigour and responsiveness, we can prove their worth to these groups and encourage even more employers to take on an apprentice.”
The first Trailblazers are now going to trial the new apprenticeship funding system which means that for every £1 the business invests in apprenticeships, they will receive £2 of government funding up to a maximum amount, depending on the apprenticeship. This will mean that businesses and government will be investing together in the skills that our economy needs.
There will also be additional incentives for completion, for small businesses and for apprentices aged 16 to 18 years.
Mr Hancock added: “This is a simple, fair system that will support employers to sit in the driving seat of the apprenticeships system in future.
The minister also welcomed an employer toolkit which NIACE (National Institute of Adult Continuing Education) have designed to help more disabled people gain access to apprenticeships, and also help employers gain access to skilled and dedicated workers.
The toolkit was developed with the support of employers and demonstrates simple and cost-effective actions employers can take to make their apprenticeship programmes open to disabled apprentices.