Budget 2009: The Most Expensive Training Course Ever?

Last Updated Apr 22, 2009 2:21 PM EDT

Chancellor Alistair Darling had to offer something to soften the blow of the latest unemployment figures. At the same time, he had to avoid spending too much in this year's Budget.

The result was a training guarantee for young people who have been unemployed for a year, and a pledge of £260m to help fund it.

This has been met with support, but there are questions over how effective it will be, for both individuals and the businesses they are being trained to join.

Of course, no-one is denying that money invested in training will be valuable. Mark Swift, a spokesman for the organisation for manufacturers, EEF, says: "It would be churlish to say this investment isn't welcome."

But there are three worries:

  1. Instead of helping the unemployed, it will turn into a box-ticking exercise that claimants have to complete to get their benefits. Philpott says: "The experience of past schemes is that they provide short-term relief to the young jobless, but do little to enhance their long-term employability."
  2. Darling didn't think to mention the needs of businesses when announcing this training -- meaning they are way down his list of priorities. "It looks superficially as if it's going to be a scheme to protect people from unemployment. If it just does that, and doesn't deliver the skills that businesses need, then in the long term it's not going to be particularly useful," says Mike Harris, head of education and skills policy with the Institute of Directors.
  3. The structure of the financing. This is as complex as you'd expect from a government that has majored in red tape and endless initiatives.
    Officially, just under half goes to the government department responsible for Train to Gain -- where it will be welcome. The training initiative has had an influx of interested businesses and is running out of money. More important, it's popular with employer groups.
    But a good portion is coming as recruitment subsidies for employers training up employees -- they'll get training funds but also support if they need to employ cover while that employee's being skilled up.
    This may be a valid route in a time of high employment, when closing the skills gap is a top priority. But, as Swift says: "The key issue at the moment is hanging onto skilled staff and preventing redundancies, not recruitment."
Watching the Budget speech felt like you had stumbled across someone squirming to try to make the most of the space between a rock and a hard place.

The training guarantee has already provided a nice opening statement for Darling in a Budget full of bad news. Whether it has any further impact remains to be seen.