The government has announced a new initiative to provide families on benefits with up to £4,500 a year to encourage their children to pursue apprenticeships. This policy aims to address the current financial disincentive for young people to enter the workforce, as many households currently face losing between £17 and £330 a week in Universal Credit payments when their children begin apprenticeship roles.
The bursary program is expected to support a few thousand households. Funding for the initiative will come from a £30 million pot derived from the growth and skills levy, which acts as a tax on employers with annual wage bills exceeding £3 million. This decision follows a report from the Social Security Advisory Committee, which warned of the "perverse effects" the benefits system has on employment choices.
The committee highlighted that some single parents with disabled children could lose up to £340 per week in benefits if their child started an apprenticeship, a figure that exceeds the expected apprenticeship salary of £258 per week.
Because apprenticeships are classified as paid employment, households often see their benefit payments reduced. The committee noted that this dynamic hampers government efforts to reduce the number of young people not in education, employment, or training (Neet).
Official figures currently show that over one million individuals aged 16 to 24 fall into this category. Former Health Secretary Alan Milburn recently warned that one in six young people could be Neet within the next five years if urgent action is not taken.
Work and Pensions Secretary Pat McFadden stated, "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." The government expects this support to remove a significant barrier for young people looking to "earn and learn." The bursary is part of a broader package that includes funding for apprenticeship training for those under 25 and additional support for employers.
While the Conservatives expressed support for the goal of increasing apprenticeships, Shadow Work and Pensions Secretary Helen Whately criticized the funding of the plan. Whately described the announcement as "uncosted," arguing that the money was already committed elsewhere. Prime Minister Andy Burnham, who has declared he is "on a mission" to reduce the number of Neets, defended his focus on the issue, noting that the rising trend must be stopped.
On Tuesday, Burnham also outlined plans to better balance academic and technical skills within the education system.
