Prime Minister Andy Burnham has announced a new £4,500-a-year bursary for households on Universal Credit whose disabled teenagers would otherwise be financially worse off by taking up an apprenticeship, as part of a wider package aimed at tackling Britain’s youth unemployment crisis.
Households on benefits who would be left worse off financially when a young person takes up an apprenticeship will soon be eligible for a new bursary worth up to £4,500 a year. The scheme, targeted at families receiving Universal Credit, was unveiled on Tuesday as part of a broader package of measures announced by Prime Minister Andy Burnham to address rising youth unemployment. Work and Pensions Secretary Pat McFadden said the welfare system should act as “a springboard to opportunity, not a barrier to it” as he set out the plans. The bursary will be available only in England, as apprenticeships and skills policy are devolved matters in Scotland, Wales and Northern Ireland.
Why the bursary was introduced
The scheme follows a report published earlier this year by the Social Security Advisory Committee, a Whitehall advisory body, which found the current benefits system distorts education and training choices for young people aged 16 and over. The report identified that families can face a sudden drop in income when a young person leaves full-time education to begin an apprenticeship, with benefit losses ranging from around £17 to £340 a week.
Officials highlighted particularly stark figures for single parents with a disabled child, who could lose up to £340 a week in benefits, well above the expected apprenticeship salary of £258 a week. Ministers have said some parents may be discouraging their children from taking up apprenticeships specifically because of an £82-a-week loss in benefits.
How the bursary will work
The new payment is designed to bridge the financial gap during the first year of an apprenticeship, when families can lose entitlement to certain Universal Credit elements once a young person leaves full-time education. It will apply specifically to 16 and 17-year-olds registered as having a disability who live in single-parent households. Ministers say the bursary is intended to ensure no eligible family is left financially worse off simply because a disabled teenager chooses an apprenticeship over remaining in full-time education.
A Government source confirmed the scheme will be targeted rather than universal, available only to a “small” group numbering in the “low thousands” whose families would otherwise face financial hardship. Around £30 million has been set aside to fund the initiative, which will be paid for through a previously announced £1 billion boost to the Growth and Skills Levy.
The source added: “This one-off bursary is about overcoming a short-term cost barrier to taking up apprenticeships for some of the most disadvantaged teenagers who may otherwise end up not in education, employment or training. Apprenticeships offer great career progression. It’s an investment in their futures and guards against a life on benefits.”
Employers who take on eligible apprentices will separately be able to access up to £8,000 in government financial support, aimed at encouraging businesses to recruit more young people who face barriers to entering the workforce.
The scale of the youth unemployment problem
Data published in May showed the number of 16 to 24-year-olds neither working nor in education or training surpassed one million for the first time since 2013, reaching 1.01 million in the three months to March. A separate interim report by former Labour minister Alan Milburn, also published in May, warned this figure could rise to one in six young people by 2031, cautioning that Britain risks creating a “lost generation” ill-prepared for employment.
Pat McFadden said: “Every young person deserves the chance to build a future they can be proud of, and our welfare system should be a springboard to opportunity, not a barrier to it. 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. Coupled with up to £8,000 in financial support for employers, this is a serious investment in the next generation and in the future of our economy.”
Wider technical education reforms
Speaking on Tuesday, Andy Burnham said he was “on a mission” to halt the rise in young people not in education, employment or training, unveiling plans to introduce new technical education routes for pupils from the age of 14. Under the proposals, pupils from Year 10 onwards will be able to combine core academic subjects such as English and maths with technical education linked to jobs available in their local area, with courses tailored to regional labour markets and shaped in partnership with local employers.
Burnham described the changes as “long overdue,” adding that it was “just not right” that young people not following a university pathway feel “they’re some kind of second-class citizens.” The Government says the wider reforms are aimed at tackling persistent skills shortages in sectors including construction, engineering, manufacturing, digital technology and green industries.
As part of the same package, the Government confirmed a further £287 million investment to create more than 22,000 additional places across colleges and post-16 providers, spread across 87 projects in England. This includes expanded construction courses to help more young people train for careers such as bricklaying, plumbing and decorating.
Reaction to the announcement
Education Secretary Lucy Powell said: “Too many young people face unnecessary barriers to apprenticeships, college places and training. We’re investing to change that. This Government is determined to help thousands more young people gain the skills, experience, and confidence they need to build successful careers. The jobs of the future are already being created – and it’s our job to ensure that every young person, wherever they live and whatever their background, has the skills and support they need to succeed.”
Philip Hoare, group chief executive of Balfour Beatty, welcomed the announcement, saying: “Apprenticeships change lives. They open doors to skilled careers, help employers build the workforce they need and play a vital role in supporting long-term economic growth. We’re incredibly supportive of the Government’s commitment to removing barriers that prevent young people from accessing these opportunities and increasing support for employers investing in the next generation. As a long-standing champion of apprenticeships, Balfour Beatty sees first-hand the difference they make to individuals, businesses and communities across the UK.”
Abdi Mohamed of disability equality charity Scope also welcomed the bursary, saying: “This bursary is a positive step which removes a real financial barrier for some disabled young people. A million disabled people in the UK want to work but face significant barriers getting into and staying in employment, so it’s encouraging to see the Government taking practical action. Life costs a lot more if you are disabled. No young disabled person should have to turn down an apprenticeship because their family would be financially worse off.”
