Businesses and students have much to gain from the latest announcements of the 2014 Budget, with a boost to school leaver and degree level apprenticeships and the abolition of NI ‘jobs tax’ for under-21s outlined for 2015/16.
Chancellor George Osborne announced support for new apprenticeships, stating: “To make sure we give young people the skills they need to get good jobs in this modern world, we’ve doubled the number of apprenticeships and I will extend the grants for smaller businesses to support over 100,000 more […] And we’ll now develop new degree level apprenticeships too.”
£170 million has been portioned for the Apprenticeship Grant for Employers (AGE) scheme for small businesses, while £20 million will be spent on supporting degree level apprenticeships.
Good news for students considering alternatives to university as figures from the Office of National Statistics reveal more than 25 percent of graduates earned less than the average wage – £11.10 – of those on work-based training schemes in 2013.
John Longworth, director general of the British Chamber of Commerce, commented: “With a huge confidence gap still separating employers from young jobseekers, we are very pleased to see the Chancellor heed our calls to help firms take on and train tomorrow’s workforce.
“Overcoming that confidence gap means more investment in young people, more apprenticeships and more jobs, which are critical with more than 900,000 16-to-24 year-olds still out of work.”
Additionally, Osborne announced his intention to abolish National Insurance contributions for under-21s for the 2015-16 tax year, providing a significant financial incentive for businesses of all sizes to employ young people.
For example, KPMG’s school and college leaver programme, which provides an entry level route into audit and pays around £20,000 per year, will save £1,697 for each of their 150 positions, which could fund an additional 12 places on the programme. Similarly with Barratt Development’s undergraduate placement programme, offering built environment work experience whilst earning £13,500 per annum, the abolition of NI contributions will save the company £800 per student.
The changes will also reduce the cost of hiring students for full time seasonal work. Firms such as charity fundraising company Home Fundraising, who offer between £7-10 per hour, stand to save approximately £83 per employee for each month.
Chris Eccles, managing director of Employment4students, commented: “This is great news for companies looking to offer entry level jobs to school and college leavers, or internship schemes to university students. Apprenticeships and school leaver programmes including Grant Thornton’s Accelerate scheme provide a real alternative to university while internships and industrial placements have become incredibly important in the battle for graduate jobs.
“We believe academic qualifications are best supported with work experience and the changes announced in this year’s Budget, from an increase in apprenticeships to the abolition of under-21 NI contributions, should provide more opportunities for young people the chance to develop their work based skills.”