Employers warn higher apprenticeship costs for over‑25s could undermine youth job plan
Britain’s biggest firms say raising training fees for older apprentices may shift, not create, opportunities for young people.
Proposed funding shift targets older apprentices
The government is preparing to revamp the apprenticeship funding model that currently supports Labour’s scheme, according to the Guardian. Under the draft plan, the cost of training a worker aged over 25 in England would rise by 25%, a move intended to steer firms toward hiring younger apprentices.
The proposal, drafted before the upcoming budget, is expected to form part of the response to Alan Milburn’s review of youth unemployment. Chancellor John Healey is anticipated to announce measures aimed at the 1 million 16‑ to 24‑year‑olds classified as NEET (not in education, employment or training).
Business reaction
Representatives of Britain’s largest employers have urged the government to rethink the plan. Robert Halfon, former Conservative skills minister and executive director of policy at Make UK, said the change would simply “shift” opportunities rather than create new ones.
Halfon added that while getting young people back into work is a “moral and economic imperative”, making training older workers more expensive is not the solution. He called on Healey to “break the cycle” of cutting and reallocating the apprenticeship budget, arguing the system already struggles to meet the needs of both businesses and young people.
He suggested that, if the government is serious about delivering good jobs and industry skills, it should expand the number of apprenticeships instead of restricting training elsewhere.
Current apprenticeship landscape
Over‑25s now account for more than half of new apprenticeship enrolments, prompting ministers to seek a rebalance toward younger participants. Andy Burnham has placed youth jobs at the centre of his agenda, proposing sweeping changes to technical education and aiming to reverse a 40 % decline in youth apprenticeship starts over the past decade.
Under the draft rules, employers could fund the full cost of an apprentice under 25 using contributions to the growth and skills levy – a £4 billion‑a‑year tax that finances the national apprenticeship system. For apprentices over 25, a “co‑investment rule” would apply, with levy funds covering only 75 % of costs and the remainder to be paid by the employer.
Employers have previously been told they could spend levy funds on training as they saw fit.
Balancing the cost of training older workers against the need for more youth apprenticeships will be a key test of the government’s approach to the nation’s job crisis.
