The clans united yesterday in the name of increasing the number of apprenticeships in Central London. Lord and Lady Flight kindly hosted a diverse group of individuals and organisations (list below) committed to improving youth employment prospects in Westminster and beyond. We were fortunate enough to have John Hayes, the Minister of State for Further Education, Skills and Simon Waugh, the Chief Executive of National Apprenticeship Service to hear us out.

I was introduced to Lady Flight, a Westminster Councillor, a couple of months ago. Through her involvement with the Sir Simon Milton Foundation she has been championing both the wellbeing of older people – through a day in the national calendar, Silver Sunday, to celebrate them – and the empowerment of young people through increased employment prospects largely via apprenticeships. Most of Lady Flight’s team are VOLUNTEERS:

“Volunteers do not have any contract of employment or contract to perform work or provide services. They are not workers and therefore are not covered by the National Minimum Wage Act 1998. This means they do not qualify for the national minimum wage (NMW)” http://tinyurl.com/BizLinkNMW

Volunteering is both necessary and commendable but as I have consistently argued in former blogs (here, here, here, here, here, here, and here), even if it was ever justified for ‘interns’, in an economy where youth unemployment is at record highs (22% in the UK – even WITH the 457,200 new apprentices) and companies are using internships as a vehicle to test out potential employees (who are increasingly saddled with debt), graduates cannot be expected to be unpaid volunteers. Today we seemed to agree that social mobility is highly desirable but unpaid internships discriminate against people who simply can’t afford to work for free. For me, this is more of a moral issue. I wouldn’t feel comfortable not paying my interns (why should they earn any less than my cleaner?) and I don’t think they’d work as hard if I didn’t. And if we have to take it this far, ‘Internships’ might not have a legal status (www.tinyurl.com/DirectGovDef) but unpaid internships are illegal! (www.tinyurl.com/BizLinkNMW)

To make any significant impact on youth unemployment we need to define our terms. Only in doing so will the 33,000 companies in Westminster be able to better engage the 3,200 NEETs. The same is true nationwide. Companies need clear and concise guidelines as to their options and obligations when taking on young people. These should be defined by who they are for, how long the engagements last, who derives the value and so how much needs to be paid. We suggest that the following definitions are adhered to:

1. WORK EXPERIENCE: Short placements (generally 1-2 weeks), usually for younger people (16-18), to get a ‘taste’ of the working world but not involving manual labour. They do not need to be paid (because the young people derive the lion’s share of the value) though companies should be encouraged to pay expenses.
2. INTERNSHIPS: 1-3 month placements, largely for undergraduates and increasingly graduates, which should be paid for legal AND moral reasons given that the company derives financial value which should be shared. (Some argue that internships should be abolished all together but their flexibility makes them useful for both employers and young people and if paid they are valid employment vehicles).
3. APPRENTICESHIPS: 1-4 year employment and training schemes for those over the age of 16 who choose not to continue their studies either at school or university. The host company derives approximately half the value of interns (as half the time is training) so the NMW is approximately half (£2.60). Employers should be encouraged to pay more and often do. Where possible travel should be subsidised to help apprentices (those in Full Time Education have their bus travel subsidised but not those in apprentices?)

If guidelines like these are subscribed to and brokered by all, then I believe companies will become increasingly more inclined to open their doors to young people. I am not in favour of further regulation just encouragement, education and incentives from government. We are not in the business of naming and shaming those that don’t pay interns (others are), rather we are in favour of persuading companies that it is the right thing to do. If Europe is prepared to invest EUR 22Bn into young people and the DWP (Department for Work & Pensions) Work Programme is picking up some of the funding from the disbanded Future Jobs Fund, at the very least why can’t the government invest in a marketing programme that will educate the masses? Mishaps like the Poundland scandal could be avoided if genuine work experience was defined, understood and undertaken (work experience should be subsidised by the JSA, manual labour should not). As well as focusing on apprenticeships, the government can’t afford to ignore the plight of graduates who are either in unpaid internships or unemployed. According to HESA 28% of graduates who left UK Universities in 2006 were still unemployed 3 years later and perhaps 38% of graduates today are on the dole. So to address youth unemployment in Westminster or anywhere else, internships and graduate jobs need to be fostered as much as apprenticeships.

We will leave it to those better placed to document the proactive discussion yesterday on apprenticeships per se. We understand that in countries like Switzerland only 16% of young people go to university. We understand that the earning power of those remaining in apprenticeship schemes could exceed those going to university. That this country once encouraged 50% of young people to go to university however requires that now it also needs to help them find employment – paid employment. We understand that there is a deficit reduction strategy and acknowledge that the UK is blessed with low interest rates and a strong credit rating but with Gross Domestic Product (GDP) falling in the last quarter, we are on the brink of recession when the US (which IS investing in recovery – perhaps too readily) saw its GDP rise 2.8% in the last quarter. The point is that there could be clever ways to invest in helping a potentially lost generation. As yesterday demonstrated, collective discussion can generate ideas, produce partnerships (Big Society or otherwise) and potentially improve the status quo. We are particularly looking forward to the ’2012 Opportunities’ lunch on 15th March with The Westminster Council & Westminster Kingsway College.

It was discussions like these that generated our partnership with STEP. Their programmes make it more financially efficient for companies to take on graduates (first using paid internships but 50% of these have turned into full time jobs). They have delivered more than 23,000 paid projects since they started in 1986 and for the last 2 years we have been helping deliver them. Recently they have helped us and UPS find 90 young people (largely graduates) to work at the London 2012 Olympic Games and we hope some of these roles will turn permanent or at least give the the skills to acquire jobs elsewhere. We are proud to have been selected to lead this initiative and are talking to other companies about working with us in similar ways. If the government was to revert back to incentivising companies to offer paid internships (as it did when we first started working with STEP) then even more progress could be made. We have suggested that companies (of a certain size) paying VAT should be able to recoup the cost of a paid intern (£3,600 + VAT) for 3 months from it. If the ROI (Return on Investment) of a graduate over 3 years is 500% (as has been suggested), then this would be an investment and from an accounting perspective, it would be funded from future receipts. More companies would then be in a position to chip in and mentor the next generation.

With the right thinking and collaboration, we can get young people back into work. We are looking into launching the Youth Employment Syndicate (YES) for those committed to this. Both interns and apprentices have a role to play in the economy but Dylan was right again, they should ‘do it for pay’.

Robin Kennedy

Our thanks to Lord and Lady Flight for including us in the discussions. Other organisations invited or represented at today’s meeting included: Westminster City Council, The London Apprenticeship Company, New Deal of the Mind/The Creative Society, The London College of Beauty Therapy, Westminster Kingsway College, De Vere Academy, London Early Years Foundation, The Centre for Social Justice, Cardinal Hume Centre, The Department for Work & Pensions, The London Mayor’s Office, The Volunteer Centre at the LSE, VAW