Opinion – Town halls’ spending power can force firms to take on apprentices

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Switch from cheap labour to training our young people, says Kevin McLoughlin

Published: 25th March, 2011

I WAS delighted to see that Wednesday’s Budget focused so strongly on the impor­tance of app­ren­ticeships with the key objective of reducing youth unemploy­ment. On the face of it, 40,000 additional app­rent­ice­­ships certainly sound good. 

However, the reality is where do they think these apprenticeships will come from? Are they hoping they will be fulfilled by the private sector or are they going to do anything constructive to help businesses extend their training facilities and give greater emphasis on youth training. My concern is that there is no “teeth” behind the rhetoric.

I train up to 15 apprentices a year – and have done so for the past 12 years. I am committed to training as I know it provides me with enthusiastic, motivated and loyal painters and decorators who really know their trade.

It is beyond belief  that, despite the national importance of apprenticeships, government and local authorities are still giving contracts to companies without insisting they reinvest in their business through the training of apprentices. There seems to be no understanding or appreciation of the fact that good training costs and, without government subsidies, the only way to recoup that cost and to continue offering app­renticeships is to charge a fair price for your work.   

In all trades there are businesses that are prepared to cut their costs to the bone to win contracts. They don’t offer apprentices and they don’t offer PAYE employment. That, in itself, raises a major issue. If you don’t officially “employ” staff via the PAYE system, how on earth can you take on apprentices? You’ve got no one to train and mentor them.

Add to this they frequently don’t use local labour (in fact, there are distinct grey areas when it comes to their method of employment). Instead they sub-contract the required workforce from the cheapest source possible yet, despite the fact that sustainability is key to the future growth of this country, they are giving nothing back to the community. 

This cannot be allowed to continue. Businesses must be made to realise that if they don’t give back to their community then the community won’t give business back to them. Local authorities and government (with the exception of Hackney, Islington and Camden – particularly Camden’s iCam2 project – which have been extremely pro-active in supporting local companies) must put a stop to this two-tiered system. It is not a level playing field. In fact, it puts local companies and suppliers at a distinct disadvantage.  

They have to insist that contractors fulfill the requirements of clause 106, which clearly states that the contractor should be committed to training and using local employees. They also need to close the legal loophole that allows companies to sub-contract their workforce on a long-term basis when, technically, they should be PAYE.

Only when the government does this will we see the number of apprenticeships available in Islington and the surrounding areas dramatically increase – something I will be truly delighted to see. 

• Kevin McLoughlin is managing director of K&M McLoughlin Decorating, based in Islington.