‘George, aged 39, has shown much promise this term in growth studies but unfortunately his performance in yesterday’s examination fell short of expectations. He seems to struggle with the fundamental concept of ROI. With time, we feel he can excel and we would encourage him to work with others to this end.’
That’s how George’s report on yesterday’s budget might read. ‘ROI’ (Return on Investment) might seem like an overly complex term for a school report but you didn’t see my 6 year old niece’s equivalent which talked about ‘visual-spatial awareness’ – as if she’d know what that was?
Anyway, what a shame that an MP with such a strong commercial upbringing (Daddy founded a very successful wallpaper company) should fail to inspire us in yesterday’s budget – at least with reference to youth unemployment. Don’t get me wrong, it wasn’t a criminal act. In terms of timing it was refreshingly short coming in at just 56 minutes – though Ladbroke’s still honoured a bet that Ken Clarke would fall asleep – but on our territory at least, it could have gone so much further.
We were actually impressed with some of George’s announcements yesterday, in particular:
- ENTREPRENEURS: Doubling and extending the Entrepreneur’s Relief Scheme and Increasing the EIS tax break threshold from 20% to 30%. This will further incentivise angel investment in new enterprise (OFFBEAT QUESTION: When will the government start incentivising investment in music rather than just film in a world where the major labels have failed ALL their stakeholders? UK Plc used to be good at music?)
- FIRST TIME BUYERS: 10,000 will now be able to put up just 5% of the deposit for a house purchase with the government and builders putting up a further 10% each.
- CORPORATION TAX: Cuts of 2p make British corporation tax rates the lowest in the G7.
But on the measures designed to tackle youth unemployment, we think there’s ‘room for improvement’…
Naturally, WEXO has long been a proponent of incentivinsing investment in graduates (see last year’s press release) who offer an excellent ROI. The same could be said for work experience. Yesterday, George committed to investing in 4 times as many 8 week work experience placements as previously for 18-21 year olds. The scheme, administered by Job Centre Plus allows those doing so to collect JSA (Job Searchers Allowance). It’s a reasonably well conceived initiative (it does confuse the distinction between work experience, paid internships and National Minimum Wage legislation addressed in a previous blog) but it doesn’t address the issue of finding rewarding work experience. WEXO consistently has people referred to it by Job Centre Plus, who get all the funding, but don’t do the work. As George pointed out, the problem is that only 1 in 10 companies in the UK offer work experience as opposed to 1 in 4 in Germany. If George wants to see a return on his recent investment he needs to address both sides of the equation.
One of the ideas that we have been looking at with Kids Company et al is for organisations to involve their graduates in administering work experience programmes, developing their management potential whilst sharing the benefits of their training with their younger, potentially less fortunate peers. WIN:WIN. Ideas like these might persuade companies to open up their doors to the executives of tomorrow. We’d like to see more support for these kinds of initiatives.
I’d like to think that the ‘Growth and Innovation Fund’ could help foster private and public sector partnerships and ROI. It’s now new (Phil Donnelly of our partner company, STEP, was kind enough to give me a copy of it in a pre-budget meeting yesterday ) and it’s only worth £50m but as a company involved in a syndicate that invested time and money to bid on LDA (London Development Agency) Internship funding, my principle concern is the inevitable bureaucracy associated with public sector funding. Having made it on to the final 3 shortlist, six months after the deadline for an announcement we are yet to hear the result and the LDA are yet to hear if they still exist!
Along with work experience, George announced a £180m package to fund 50,000 more apprenticeships over the next four years, and 24 ‘University Technical Colleges’. We like the idea of practical tertiary education but as the Telegraph argued earlier this month, the concept of apprenticeships itself feels outdated and what about graduates? Wasn’t this the perfect opportunity to atone them for the tuition fee hikes? We disagree with the FSB that the universities (HEFCE) should be given more funding to run internships schemes but isn’t there a way the government can work directly with the private sector to help graduates?
As a parting shot (and leaving aside ‘Blairgate’), if each cruise missile we fire at Libya costs around £500k and we’re so in need of economic stimulus back home, why did the House of Commons vote so vehemently (557-13) in favour of military intervention?