Britain’s largest employers are urging the government to rethink a plan that would raise training costs for workers over 25. Source: theguardian.com.
Government Proposes 25% Cost Increase for Older Workers
The UK government plans to revise apprenticeship funding in England by increasing training costs for workers over 25 by 25%.
This change would apply to apprentices over age 25, who would face a co-investment rule.
Under the new rule, levy funds would cover 75% of training costs.
Business Leaders Warn Against the Change
Business groups say the plan shifts job opportunities, rather than creating new ones.
Robert Halfon of Make UK said the move would not solve youth unemployment.
“It will just mean opportunities are shifted around instead of creating new ones. We agree that getting young people back into employment is a moral and economic imperative. But making it more expensive for employers to train older workers isn’t the answer.”
Halfon said the apprenticeship system already struggles to meet demand.
He urged the government to expand apprenticeship access instead of restricting training for older workers.
Why the Plan Is Being Considered
Ministers are responding to Alan Milburn’s review, which found a 40% drop in youth apprenticeship starts over the past decade.
Labour has set a target of 30,000 youth apprenticeship starts during the current parliament.
Only 160 young people have enrolled in the foundation apprenticeship scheme in the first eight months.
Government Response to the Proposal
A government spokesperson said the focus is on reversing the decline in youth apprenticeships.
“It’s right that we focus on reversing the 40% decline in the number of young people starting an apprenticeship and give them the skills they need to succeed. That’s why we have reformed the system backed by £3.3bn to deliver 50,000 additional apprenticeships for young people and support employers with a new hiring payment of £2,000 for SMEs who take on a 16- to 24-year-old apprentice.”
The Milburn Review is due in autumn. The government said it will not pre-empt its findings.
Business Leaders Call for Support, Not Barriers
Business leaders are urging Chancellor John Healey to use the upcoming budget to reduce broader business costs.
Kate Shoesmith of the British Chambers of Commerce said: “At a time when businesses are under pressure to improve productivity and drive growth, employers need greater flexibility and support to invest in skills at every stage of a person’s career. The best way to encourage more youth apprenticeships is to make it easier and more affordable for firms to take on young people by reducing the wider costs of doing business, rather than creating new barriers to training.”
They argue that adult training remains vital for workforce adaptability, especially as AI reshapes jobs.
John Foster of the CBI said skills development should not be 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, particularly as AI reshapes the workplace.”
Ben Rowland of the Association of Employment and Learning Providers warned against abrupt changes.
“The key to any further changes to the apprenticeship system is to bring employers on the journey. Anything that is too abrupt or too quick significantly endangers that.”
Key Limitations and Open Questions
The proposal has not been finalised. The government has not confirmed it will proceed with the 25% cost increase.
There is no clear evidence the plan will boost youth apprenticeship enrolments.
Employers fear reduced investment in adult training could limit workforce flexibility.
Without broader business support—like tax relief or cost-sharing—the plan may face resistance.
Any reform must balance youth employment goals with lifelong learning and mid-career skill development.
For more on how apprenticeships are reshaping the UK job market, see England to Charge Firms More for Training Older Workers to Boost Youth Apprenticeships.
For a broader view on who needs jobs, see It’s Not Just Young People Who Need Jobs.
For a deeper look at Labour’s job guarantee proposal, see Labour’s Job Guarantee Proposal: A Macro-Economic Response to Youth Unemployment.
For data on regional disparities, see UK Towns with Fewest Jobs for Young People Revealed.
For insights on AI’s impact on work, see AI Surveillance at Work: How Employers Are Monitoring Employees and the Human Cost.
Sources & further reading
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