- Greener Journeys calls on Government to adopt a concessionary scheme for apprentices to assist with the cost of getting to work by bus
- Initiative would help tackle the prohibitive cost of accessing work on ‘apprentice minimum wage’ and address youth unemployment crisis
- Detailed fiscal analysis demonstrates the scheme would give the UK economy a boost of almost £27.3 million a year – £2.44 of benefits for every £1 invested
The Government should implement a nationally funded scheme of concessionary bus travel for young people in the first year of their apprenticeship. The scheme would improve access to jobs by making it easier and cheaper for up to 510,000 apprentices to commute to work by bus.
With more than one million 16-24 year-olds in the UK not in education, employment or training, new measures are needed to ensure we foster talent among the young in the UK. Apprenticeships form a key part of the Government’s strategy, however with the ‘apprentice minimum wage’ set at £2.68 an hour – or approximately £5,200 per year – the cost of getting to work means many young people cannot afford to take on a position if they manage to secure one. According to Department for Transport research, around a third of young people not in employment, education or training think they would have chosen to participate in education or training if they had more money to cover the cost of transport (Ibid).
The policy proposal from Greener Journeys – the campaign to promote sustainable travel – builds on a series of proposals in the recent Bus 2020: A Manifesto for the next Parliament, which set out how the Government can harness the potential of the bus to catalyse growth and jobs.
How the scheme would work
Working with KPMG LLP, and in consultation with over 50 expert stakeholders from across local and central government, industry and business, Greener Journeys has designed the following mechanism for delivering a simple, flexible and low-cost scheme:
- The scheme will be administered by a third party supplier who will issue vouchers to eligible apprentices on production of a Unique Learner Number, a UK Provider Reference Number and an administration fee
- The apprentice uses the voucher to pay for stored travel rights (eg. carnet, season ticket or PAYG top-up) at a travel centre or online
- The bus operator invoices the third party supplier for the value of the voucher that has been exchanged for stored travel rights. The third party supplier invoices the Government for the value of the voucher issued plus an administration fee
- The total value of the discount to each apprentice is capped at £250 per year and issued on a monthly basis
- Bus companies may in addition choose to provide products specifically designed for apprentices.
Implementation of a concessionary scheme would also have clear benefits for the wider economy. Our detailed fiscal analysis suggests the scheme will generate a net benefit of £27.8 million per year to the UK economy providing £2.44 of benefits for every £1 invested – high value for money according to the Department for Transport’s appraisal guidance*. Wider benefits to the economy are expected to increase over time as new demand stimulates the need for further capacity and further service improvements.
Claire Haigh, Chief Executive of Greener Journeys comments:
“Unless we tackle the epidemic of youth unemployment, we will damage the country’s chances of strong, sustainable growth. We must do everything we can to help young people access job opportunities.
“Implementing a concessionary scheme that helps apprentices overcome the unassailable barrier that the cost of commuting can pose should be a key part of the Government’s strategy to help one million young people take their first steps on the career ladder.”
*The scheme would cost the Treasury £19.0 million per year in terms of concessionary payments (£17.4 million), a reduction in fuel tax revenues from car-based commuting (£1.6 million). In return, bus users’ benefit by £34.6 million, non-users by £4.8 million, bus operator’s benefit by £0.9 million and the wider economy by £6.1 million, with net benefits expected to increase over time as new demand stimulates the need for additional capacity.