According to the government, some parents receiving benefits will receive up to £4,500 annually to encourage their kids to begin apprenticeships.
Families will be given a bursary to replace Universal Credit payments lost by beginning jobs as part of initiatives to get young people into the workforce.
A few thousand households, who currently risk losing between £17 and £330 per week if their children begin apprenticeships, are anticipated to benefit from the payout.
Prime Minister Andy Burnham’s support for apprenticeships was applauded by the Conservatives, but his proposals to finance the bursaries were challenged.
The growth and skills levy, a tax on firms with yearly wage costs exceeding £3 million, will provide the £30 million sum used to support the bursary.
It came after a report from the Social Security Advisory Committee was released, warning of the “perverse effects” of the benefits system on the employment choices of young people.
For instance, it stated that if a disabled child began an apprenticeship and earned more than the typical weekly pay of £258, single parents might lose up to £340 in benefits.
Benefit payments to households where young people participate in apprenticeships are lowered since they are categorised as paid employment.
The committee claimed that the system was impeding government initiatives to lower the proportion of young people who are not enrolled in school, working, or receiving training (Neet).
According to a recent report by former Health Secretary Alan Milburn, if immediate action is not taken, one in six young people may become Neet within the next five years.
Over a million people between the ages of 16 and 24 are currently Neet, according to official statistics.
The government said that its new bursary will enable young people to “earn and learn” by removing a barrier to apprenticeships.
Employment and Pensions Secretary Pat McFadden said: “By providing bursaries to those who need them most and fully funding apprenticeship training, we are making sure cost is not the reason someone misses out.”
It is a component of a larger package of assistance for apprenticeships that also includes financial help for firms hiring apprentices and financing for apprenticeship training for those under 25.
Shadow Work and Pensions Secretary Helen Whately stated: “I’m glad Burnham agrees: apprenticeships are a good thing, and we need more of them.”
However, she claimed that the proposal was “uncosted.”
“It involves using funds that have already been committed elsewhere. Therefore, either Andy Burnham is lying to us about his intentions or this is just another underfunded statement.”
According to Burnham, he is “on a mission” to lower the Neet population.
“The trend is rising at the moment, so the first thing I’ve got to do is to stop that rise,” he remarked.
Burnham outlined proposals on Tuesday to balance the importance of academic and technical abilities in the educational system, continuing a wave of early policy announcements.
For some Universal Credit households, new payments have been verified.
To encourage more people to pursue apprenticeships, bursaries worth up to £4,500 per household will be offered annually.
The payments will “remove barrier that can otherwise discourage young people from taking up an apprenticeship,” according to the DWP.
The money would “target the small number of Universal Credit families for whom the current system disincentivises apprenticeships,” according to ministers.
One of Andy Burnham’s top priorities as the new prime minister is to address youth unemployment.
“A Social Security Advisory Committee report found that when a young person began an apprenticeship, they could lose up to £340 per week in benefits, exceeding the expected apprenticeship salary of £258 per week,” the DWP stated.
“The bursary, funded through the £1 billion additional investment in the Growth and Skills Levy announced in May, will help stop young people from turning down the chance to earn and learn due to cost,” the statement reads. “This shortfall is addressed so that this is no longer a barrier to a young person taking up an apprenticeship.”
“Every young person deserves the chance to build a future they can be proud of, and our welfare system should be a springboard to opportunity, not a barrier to it,” stated Pat McFadden, Secretary of Work and Pensions.
We are ensuring that no one is left out due to cost by offering scholarships to those who most need them and completely paying apprenticeship training.
“Coupled with up to £8,000 in financial support for employers, this is a serious investment in the next generation and in the future of our economy.”
“Too many young people face needless barriers to apprenticeships, college places, and training,” stated Education Secretary Lucy Powell. We are making investments to alter that.
“The jobs of the future are already being created – and it’s our job to ensure that every young person, wherever they live and whatever their background, has the skills and support they need to succeed.” This government is committed to assisting thousands more young people in acquiring the knowledge, expertise, and self-assurance necessary to establish prosperous careers.