The Guardian reported that Britain's largest employers have warned the government that its plan to increase the cost of training workers over the age of 25 risks damaging efforts to tackle youth unemployment. Ministers are understood to be planning to overhaul Labour's apprenticeship funding scheme to raise the cost of training an over-25 worker in England by 25%, drawn up ahead of this week's budget. The proposal is expected to form part of the government's response to Alan Milburn's review into youth unemployment, with Chancellor John Healey widely expected to announce measures to support opportunities for young people and address the 1 million 16- to 24-year-olds not in education, employment or training across the country.
Under the scheme, employers would be able to fund the full cost of an apprentice under 25 using money from the growth and skills levy, the £4bn-a-year tax that funds the national apprenticeship system. For older workers, employers would face a co-investment rule where levy funds cover only 75% of costs, with the remainder needing separate funding. Robert Halfon, executive director of policy at Make UK, the manufacturing lobby group, said the approach would simply shift opportunities rather than create new ones. "We agree that getting young people back into employment and training is a moral and economic imperative. But making it more expensive for employers to train older workers isn't the answer," he said, urging the government to grow the total number of apprenticeships available rather than restrict training elsewhere.
Business leaders have raised broader concerns about the timing and approach. The CBI's John Foster said: "We can't make skills a zero-sum game. While it is right to focus on supporting young people who are Neet into work, adult training also has a vital role to play in opening up entry-level opportunities and helping people adapt and update their skills mid-career." Kate Shoesmith at the British Chambers of Commerce said employers need "greater flexibility and support to invest in skills at every stage of a person's career," arguing the best way to encourage youth apprenticeships is to reduce wider business costs rather than create barriers to training.
The government has already announced £3.3bn in backing to deliver 50,000 additional apprenticeships for young people and introduced a new hiring payment of £2,000 for small and medium-sized enterprises taking on a 16- to 24-year-old apprentice. Ministers have said they want to reverse a 40% drop in youth apprenticeship starts over the past decade, with over-25s currently accounting for more than half of new apprenticeship enrolments. The scheme is not yet finalised. A government spokesperson said the Milburn Review is due in the autumn and that the government will not pre-empt its findings.
For employers and workers seeking training, the proposed changes could make it significantly more expensive to train workers over 25 while reducing the cost of younger apprentices, potentially forcing businesses to choose between workforce development strategies and cost management.