A new digital skills training fund will be piloted in the U.K. in January which will offer loans to non-graduate young people from East London with the dual aim of tackling the ongoing U.K. tech skills shortage while also addressing a socio-economic gap that tech risks exacerbating.
The fund, called the Tech City Fellowship, will offer educational loans of up to £11,600 per student to non-graduate 18 to 25 year olds to pay for a place on a training course that teaches software developer skills.
The 12-week coding bootcamp course in question is being run by Makers Academy, one of the collaborating partners for the Fellowship. The loan breaks down into £8,000 to cover course fees and £1,200 per month living costs for the duration of the course.
Students completing Makers Academy’s bootcamp will then be guaranteed either junior developer jobs or internships, as part of the Fellowship program.
Two companies have committed to providing jobs or internships so far — namely fashion e-commerce aggregator Lyst and collaboration platform ProFinda. The aim is to attract more partners to the scheme to be able to scale up and offer the Fellowship to 100 young people per year.
It’s not clear how many students will be offered loans during the initial pilot, but presumably far short of that 100 goal — given there are only two companies on board supporting the job pledge.
Update: The current funding commitments backing the scheme — which includes £12,000 from ProFinda plus “private donations” from VCs and the tech community — are enough to put one student put through the pilot this February. A spokeswoman for Maker Academy added that the aim is to raise a further £100,000 by the end of Q1 2015 to increase the total number of students to eight. So yes, very far off the 100 student target.
“Going forward, we ultimately hope to scale up the scheme to increase the number of funding partners so that we can offer the Fellowship to up to 100 young people per year. Now the structure for the fellowship is in place, we believe this aspiration is entirely achievable and [are] calling on the sector to come with us on this exciting journey,” she added via email.
The Fellowship has come out of the Connecting Tech City (CTC) project, which looks for ways to link the benefits of the East London tech-fueled boom with local residents. CTC is itself an initiative of the Centre for London not-for-profit thinktank, which focuses on addressing a range of challenges faces by the U.K.’s capital city, from the environment, to housing, to economic and societal issues.
Before London’s East End became a high profile trendy startup hub — with the oxygen of publicity pumped into it by the government’s Tech City initiative — it had a less shiny reputation for economic deprivation. Back in 2010 the London Boroughs of Hackney and Newham were rated the 1% most deprived in England by the government’s Department for Communities and Local Government. Tower Hamlets was not far behind on that index.
The Tech City years — along with other factors such as investment from the 2012 Olympics — brought the region money and attention, attracting businesses and startups. This has evidently had localized economic impacts — not least driving up rents for startup office space. But poverty persists and inequality in East London has been growing, perhaps exacerbated by incoming techies vs local long-time unemployed residents who are not participating in this tech-fueled boom.
A 2013 report into London’s poverty profile compiled by the New Policy Institute thinktank notes some improvements in Inner East London Boroughs but also ongoing poor performance, with factors such as inequality, child poverty, unemployment, qualifications at 19 and pay inequality ranked as worse in Tower Hamlets relative to the rest of London.
Moves to provide East London youths with support to learn the tech skills that are fueling a localized job boom are certainly welcome, although this Fellowship will need to scale up substantially if it’s to make a significant difference to rates of socio-economic deprivation in the region.
It’s also not clear at this point what the Fellowship’s loan repayment terms will look like. And while taking out a loan to cover three months of education is inevitably a lot cheaper than having to pay for the traditional three years of higher education, it’s still being saddled with a large debt that demands repaying so the devil will be in the detail when it comes to how successful this scheme will be at using tech to try to bridge a long-term socio-economic divide.
East London residents in the specified age bracket who are interested in finding out more about the Fellowship can find more details here.