Mastodawn

Pat McFadden’s perverse benefit cuts that is undermining the government’s apprenticeship initiative

05/07/2024. London, Pat McFadden, poses for a photograph following his appointment to Cabinet by Prime Minister Sir Keir Starmer in 10 Downing Street. Picture by Lauren Hurley / No 10 Downing Street

With a million young people currently not in work, training or school the government’s plans for a huge increase in apprenticeship programmes is a key plank to get people back to work. The full scale of the programme is published by the business department here.

Yet it turns out that the Department for Work and Pensions is undermining its own initiative by a series of hidden benefit cuts which have been exposed by the experts who monitor changes in the benefit system.

The Social Security Advisory Committee, a panel of experts appointed to scrutinise benefit changes in the ministry, has just produced a highly critical report, revealing that the families whose 16 year olds take up apprenticeship can lose thousands of pounds a year in benefits the moment they take up a place.

“The report shows that when a young person leaves full‑time education to start an apprenticeship, families can face a sudden loss of social security financial support. Often the young person’s apprentice wage theoretically offsets this – although in practice, their parents will only be compensated if a lot of the pay packet is handed over to them. Sometimes, the loss is so great that the household as a whole is worse off – which means that, even if all the apprenticeship earnings were handed to the parent, the family would be poorer. This is particularly the case when the young person has a disability and the loss of social security income can be greater than the apprenticeship wage.”

What is happening is that the family immediately lose child benefit when the 16 year old takes a job and the 16 year old loses his or her universal credit. which is paid to parents. The most seriously affected are disabled people – who the government want to take up jobs – who lose additional benefits.

While the apprentice will receive £8 an hour he or she is expected by the ministry to hand over the money to the family to compensate them. But in many cases the social security experts found the cash fell short. It varied from £68 a month to £1320 a month if the person was disabled.

Stephen Brien

Dr Stephen Brien, Chair of the Social Security Advisory Committee, said:

“The social security system is not neutral in the choices young people make at 16. In its current form, it can penalise families when young people take up apprenticeships, even though this is a route that government actively encourages. This creates a real risk that decisions are driven by short‑term affordability rather than what is right for a young person’s long-term future.”

In some cases it can lead to the young person abandoning the apprenticeship altogether as the benefit cuts come as a shock and even advisers don’t seem to know about this change.

There is also a rather extraordinary irony in all this – if the young person chooses to turn down the apprenticeship and stays at school, the family continue to get child benefit and disabled people get help. This is exactly the opposite of what the government wants to happen.

The committee are recommending changes to this -particularly if it affects disabled people. But there are no signs despite the cost of living crisis that the ministry wishes to make any change.

I expect with all the plotting surrounding Labour Party leadership Pat McFadden will take his eye off the ball and yet another good government initiative will bite the dust because of penny pinching and Labour being out of touch with voters real lives.

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#apprenticeships #departmentForWorkAndPensions #PatMcFadden #socialSecurityAdvisoryCommittee