The British government is considering overhauling its apprenticeship funding system to increase the cost of training workers over 25 by 25%, according to reports ahead of the budget announcement. The proposal aims to encourage employers to prioritize training younger people and forms part of the government’s response to concerns about youth unemployment, with over 1 million individuals between 16 and 24 currently not in education, employment, or training.
Under the proposed system, employers would be able to use their levy contributions fully for apprentices under 25, but would face new cost-sharing requirements for older workers, where levy funds would cover only 75% of training expenses. Business leaders have expressed significant concerns about this approach, arguing it would redistribute training opportunities rather than expand them overall. Manufacturing lobby group Make UK’s Robert Halfon stated that the government should instead grow the total number of apprenticeships available rather than restrict training in other areas.
Multiple business organizations have called for reconsideration of the plan. The CBI, Association of Employment and Learning Providers, and British Chambers of Commerce all warned that the changes could create barriers to skills development and that adult training plays a vital role in workforce development. They suggested alternative approaches, such as reducing the broader costs of employment for businesses to make youth apprenticeships more attractive to firms.
The government has stated its commitment to reversing a 40% decline in youth apprenticeship starts and has already implemented a £2,000 hiring payment for small and medium-sized enterprises taking on young apprentices. A government spokesperson indicated that specific details would follow the Milburn Review into youth unemployment, expected later in the autumn. However, business leaders have also been pressing the government for broader support amid rising operational costs and recent increases in employer contributions.
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