Firms to receive £1,000 grants for taking on trainees

Experts welcome traineeship programme’s expansion, but warn it should be ‘one part of the puzzle’ in improving employment rates

Businesses in England will be given £1,000 grants to take on trainees as part of a government bid to address mounting fears around coronavirus-fuelled youth unemployment.

The government has pledged to expand its existing traineeship scheme to provide 30,000 new traineeships under a £111m funding boost to help young people in England get work experience. Scotland, Wales and Northern Ireland will receive £21m between them for similar schemes. 

Introduced in 2013, the traineeship programme provides classroom-based lessons in maths, English and CV writing, as well as up to 90 hours of unpaid work experience. Additional funding for the scheme is set to be announced by chancellor Rishi Sunak on Wednesday (8 July), alongside wider plans to help the UK economy recover from the coronavirus pandemic. 

Traineeships offer 16 to 24-year-olds pre-employment training and work placements of between six weeks to six months. A traineeship is not classified as a job, meaning employers are not required to pay trainees for their placements, but they may offer to cover transport and meal costs.

With the extra money, the government is hoping to triple the number of trainees in England, while also increasing funding going to training providers. The plan is for the expanded scheme to be in place in England from September 2020.

Around 15,000 people undertook traineeships in 2018/19, compared to a high of 24,100 in 2015/16.

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In a statement, the Treasury said expanding traineeships would be part of a wider package to support young people and ensure they had the skills and training to go on to “high-quality, secure and fulfilling” employment. It added that evidence shows three-quarters of 18-24 year-olds who complete traineeships move on to employment or further study within 12 months.

Lizzie Crowley, skills adviser at the CIPD, told People Management that in the past the traineeship scheme had been positively received as a pathway to further learning, apprenticeships or employment. But, she added: "That evaluation was happening when the economy was growing quite strongly, and there were quite a lot of jobs in the labour market.

"The introduction and boosting of unpaid work experience schemes in the current economic conditions risks the destinations not being positive as seen previously," Crowley explained, adding that this increase in traineeships needed to be part of a larger package around job creation measures. "It's unlikely there will be jobs for these young people to go into at the end of their placement,” she warned.

Jack Kennedy, economist at Indeed, agreed that the key question was how many traineeships would lead to jobs, and more broadly whether the UK jobs market would recover sufficiently so that there were other roles available. If it didn’t, such a scheme could prove invaluable, he said.

“Overall job vacancies in the UK have fallen dramatically since the outbreak of Covid-19, and young people tend to be particularly hard hit during downturns," Kennedy said. "This could leave many wondering where to turn to next. The traineeship scheme could be a lifeline for those whose plans have been disrupted and is a step in the right direction."

Kirstie Donnelly MBE, CEO of City & Guilds Group, welcomed the government's investment but cautioned such traineeships may, due to typically being unpaid, not be suitable for all young people. 

"So, while these programmes can be a great opportunity for many to get critical training and workplace experience, they may not be suitable for young people who need to earn to support themselves and their families,” Donnelly said. She added traineeships should "only ever be one part of the puzzle" in improving employment in the UK, because people across a wide spectrum of ages would be looking for work as a result of the pandemic. 

Young people aged 16-24 were twice as likely as the rest of the workforce to be employed in sectors shut down because of the coronavirus crisis, according to recent research by the Resolution Foundation. 

The study identified more than 6 million UK workers employed in sectors that had been ordered to shut, including hospitality, retail, leisure and the arts. Between 25 and 55 per cent of 16-24 year olds worked in these sectors, it found, compared to less than 20 per cent of the rest of the workforce.

This expansion of traineeships followed an announcement by the prime minister that every young person would have the chance of an apprenticeship or work placement. 

Boris Johnson said: “As the economy recovers, we also know the jobs that many people had in January are not coming back. We know that's the biggest economic challenge that we face and so we will also offer an opportunity guarantee so that every young person has a chance of an apprenticeship or in-work placement so that they maintain the skills and confidence. They need to find the job that is right for them.”