Hammond under pressure on apprenticeships as Brexit clock ticks
Budget should include measures on training and skills shortages, with British firms set to lose easy access to migrant labour.
Go to university and you get a head start on your peers. In a Britain of haves and have-nots, this remains a widespread perception. But Tom Ratcliffe disproves it. Unlike his history graduate friend, who is working in Sports Direct in their home city of Derby, the 23-year-old has had more luck as an apprentice to one of the world’s oldest clockmakers.
“I have friends coming out of university without a job. There just isn’t the work out there for them,” he says. Instead of graduating with a huge debt and no guarantee of work, Ratcliffe is among thousands of apprentices in Britain being paid to learn on the job.
In the Budget on Wednesday, Chancellor Philip Hammond will be expected to address the problem of skills shortages in Britain, as demands for more investment in schools and training escalate in an economy needing more workers like Ratcliffe. After years of underinvestment in workplace training, and faced with the prospect of firms losing access to migrant labour, the UK needs to bolster its domestic workforce. Companies are increasingly reporting shortages of key skills.
Ratcliffe is one of several apprentices at Smith of Derby. Established in 1856, the firm is responsible for famous timepieces the world over, from the tower clock at St Paul’s cathedral to ones on the customs house in Shanghai and Arsenal’s emirates stadium.
With just 57 staff and revenue of about £3m a year, it’s a small company. But it’s a big name in the world of horology, maintaining about 4,500 clocks around Britain. About 20 staff were dispatched to put clocks on public buildings back by an hour when British summer time ended last month.
Despite a government push on apprenticeships, few employers have responded. The number of apprentices starting in May, June and July was down by 61% compared with the same time last year, raising doubts over the government’s pledge of 3 million new apprentices by 2020.
Smith of Derby has taken on apprentices for the first time in several years. The firm was founded by an apprentice, John Smith, whose descendants still own the company. “At the moment, we have a succession issue, so we have to bring new blood in,” says managing director Bob Betts.
More apprentices will soon be needed, as decades of access to flexible, skilled migrant labour looks set to be curtailed by Brexit. Some economists believe the availability of trained migrant labour has made firms complacent. Figures from the European Commission’s statistics body, Eurostat, show that British companies invest half as much per worker in vocational training as the EU average, and that investment in skills has fallen by 9% in real terms over the past decade.
Yael Selfin of accountant KPMG says: “Companies will need to invest more in their staff, because labour isn’t going to be as easily available. You need to start with schools, giving youngsters more opportunities, as well as more apprenticeships.” Accountant Deloitte estimates that a third of non-British workers in the UK are thinking of leaving within five years – equal to 1.2 million jobs.
Developments in technology are also putting a greater emphasis on skills, with 15 million jobs thought to be at risk from automation. And with the productivity of UK employees stubbornly refusing to rise, additional spending on training could boost efficiency levels.
Smith’s apprentices learn to work with industrial revolution-era kit, which may seem a strange fit for millenials comfortable with smartphones and social media, but they also get the chance to travel. The company has growing sales in the Middle East, and projects in Asia and North America.
“I enjoy working hands-on with old stuff,” says Sam Schoonderwoerd, another of the apprentices. “It was never something I considered when I was younger, but it’s fallen into place.” The 20-year-old from Derby is in his second year at the firm and spends a day a week at college studying for a higher national certificate – equivalent to the first year of a university degree.
With tuition fees at over £9,000 a year, many young people are put off higher education at a time when the cost of living is rising. Hammond’s budget will be expected to cater for this generation, as the Conservatives look to reverse a flight by younger voters to Labour.
More help with apprentices could be a remedy, if technical training is seen as a path to a good job, without high levels of debt. Mitchell Eaton, 20, another apprentice at Smith of Derby, says he found it hard to concentrate at school and prefers to learn on the job: “Rather than doing university, I’m learning and getting paid at the same time – which is a bonus.”.
But if Hammond wants more apprentices like these, he will need to show businesses that the government is ready to support their hiring plans.
The Confederation of British Industry has made protecting per-pupil funding in schools a key priority in its submission to the chancellor ahead of the budget. Skills, training and the country’s industrial strategy will also be key themes for the group. Director general Carolyn Fairbairn says investing in education and training is the “best economic growth strategy we have”.
guardian.co.uk © Guardian News & Media Limited 2010