• New apprenticeships to be created in retail, hospitality and construction
• Sadiq calls on Ministers to devolve adult careers provision to City Hall
The Mayor of London, Sadiq Khan, who campaigned to be London’s most pro-business Mayor ever has today reaffirmed his commitment to delivering skills and training for London’s young people by announcing £1.3 million in funding to help businesses create 2,000 new apprenticeships.
In the UK, apprenticeships are funded through a levy that is paid by all businesses with an annual pay bill in excess of £3 million. However, apprenticeship starts in London have fallen by 21 per cent since the Government introduced the levy in April 2017. London’s businesses contribute more to the apprenticeship levy than any other region – but two in five of these businesses don’t spend any of the available levy funds, and a further two in five spend less than half.
This means that money is being returned to the Treasury, rather than being invested in young Londoners, with retail, hospitality and construction among the most affected sectors.
Speaking today at Skills London, the capital’s largest careers fair, Sadiq announced that he is investing £1.3m in pilot projects designed to help employers spend their levy funds on high quality apprenticeships, or else transfer the money down the supply chain to smaller business, to keep the benefits of the funding in the capital. Through this process, the Mayor expects to boost his credentials as the pro-business Mayor and help businesses create 2000 new training opportunities for London’s young people, with a particular focus on retail, hospitality and construction industries.
The Mayor is calling on apprenticeship funding to be devolved to London alongside funding and responsibility for adult careers services. This would include the devolution of the London area-based delivery of the National Careers Service. He also wants to see London’s share of the UK Shared Prosperity Fund, which will replace valuable European funds following Brexit, to be fully devolved to London.
Sadiq is already working hard to help young Londoners succeed. He has set up his Construction Academy to improve construction skills. He has also expanded the London Enterprise Adviser Network and is investing £114m in new buildings and equipment for skills training across London.
The Mayor of London, Sadiq Khan said: “From biotech, engineering and construction to retail, hospitality and healthcare, London needs workers with the skills to support the rich variety of our economy.
“Given the uncertainty surrounding Brexit, ensuring a better and more responsive skills network – as well as continued access to global talent - is more important than ever.
“Apprenticeships are a key part of my commitment to being London’s most pro-business Mayor and giving young Londoners the skills they need to succeed – they benefit individuals, businesses and the whole London economy – so I’m delighted to be able to announce further funding to unlock more opportunities across the capital.
“Now we need the government to recognise our success and devolve adult careers services provision to City Hall.”
London has a strong, dynamic, global economy, but the region’s employment rate has lagged-behind the national average for three decades. More than 230,000 working-age Londoners are unemployed, with particularly high rates of youth unemployment. Ensuring an effective and responsive skills system is critical to tackling this issue.
Sadiq believes that an effective skills system is critical to meeting the needs of London’s businesses. Employers repeatedly report skills shortage vacancies and skills gaps in their workforce, impacting on growth and productivity.
London First Chief Executive, Jasmine Whitbread said: “Every young Londoner should have the chance to be a part of our capital’s success. Skills London will bring together more than 200 employers, 35,000 youngsters, and a record 55,000 career opportunities - including apprenticeships and on-the-job training.
"We're delighted the Mayor is taking action to boost apprenticeship numbers in the capital, particularly in the construction sector, which is facing chronic skills shortages.
“London fares best when in charge of its own destiny, so it's good news the Mayor will take control of the adult education budget. This should be extended to the National Careers Service to ensure business, educators and civic leaders are working together to give our young people the very best start in the world of work."
Anthony Impey, Chief Executive of IT and telecoms business Optimity and chair of the GLA Apprenticeship Group said: “The Mayor’s announcement comes at a critical time for London’s businesses, who are already struggling to recruit the people they need, even before the full impact of Brexit. Never has the need been greater for companies to develop their own talent, and apprenticeships provide an excellent way to do this.
“I have first-hand experience of the immense benefits apprenticeships can provide organisations of any size, not least their return on investment. I’ve also seen the huge impact that it can have on young Londoners, by supercharging the start of their careers and giving them access to some of London’s most exciting sectors. The Mayor’s support is vital to ensure that these advantages are available to as many as possible.
“London’s global competitive advantage rests on its ability to be a world-class place to recruit and develop talent, and the Mayor’s ambition for apprenticeship plays a key role in achieving this.”
Mary Vine-Morris, London Director of the Association of Colleges said: “London is a city open for business – the Mayor’s new investment in apprenticeships makes that clear.
To continue to be one of the best cities in the world to work and to live, it is vital that London works with employers to ensure a strong pipeline of skilled workers.
For too long there has been too little investment, politically as well as financially in London’s apprenticeship offer. That is why we welcome the drive to make better use of London’s levy spend. Rather than it going back to treasury unspent, it would be better being used to create more meaningful opportunities for London’s young people to get into work and to get on in life.”
Sarah Beale, CITB Chief Executive said: “Construction apprenticeships offer huge opportunities to young people, enabling them to earn as they learn, avoid the debt of student loans and gain the practical skills experience employers want.
“CITB estimates that London will require an estimated 10,000 construction workers between now and 2022 with plant operatives, civil engineers and scaffolders among the most in-demand roles. Creating new, high quality construction apprenticeships to help young people fill these job roles is welcome news.
“CITB is supporting the development of the Mayor of London’s new Construction Academy. We look forward to working with the Mayor and partners across industry to give London’s young people the best possible chance of starting rewarding construction careers.”
With the Adult Education Budget set to be devolved to City Hall from 2019/20, the Mayor will have £311 million to provide the targeted, high quality skills training Londoners require.
This will be supplemented by £71 million from the European Social Fund. This money will be used to help young people and adults who may have missed out on opportunities due to circumstances beyond their control and now need a second chance to access education, training and employment.
Sam Gurney, TUC Regional Secretary, London, East and South East, said: “It is crucial that young Londoners have access to quality apprenticeships, which provide genuine training and pay a fair rate for the job.
“We welcome the Mayor’s new funding and hope that it will support Londoners to gain the skills our city needs.
“In particular we welcome work to increase the number of women, BME and disabled people taking up apprenticeships in areas like construction and engineering where they are seriously underrepresented.”