Business Leaders Push Back on Dearer Training for Over-25s
Business leaders have urged the government to reconsider a plan to make training older workers more expensive in England.
Ministers plan to overhaul the apprenticeship funding scheme in England so that training a worker over 25 costs 25% more, in order to encourage firms to train young people. The proposal, drawn up before Wednesday's Budget, is not yet finalised. It is expected to form part of the government's response to Alan Milburn's review of why so many young people are unemployed.
How the change would work
Employers could fund the full cost of an apprentice under 25 from the growth and skills levy, the £4bn-a-year tax that pays for the national apprenticeship system. Employers have for years been told they were free to spend their levy funds on training as they saw fit.
Over-25s account for more than half of new apprenticeship enrolments, and ministers have said they want to rebalance the system towards younger people. Chancellor John Healey is widely tipped to announce measures for the 1 million 16- to 24-year-olds not in education, employment or training.
Business response
Robert Halfon, a former Conservative skills minister now at Make UK, said: "It will just mean opportunities are shifted around instead of creating new ones." He urged the government to grow the number of apprenticeships instead of restricting training elsewhere.
John Foster of the CBI said skills should not be a zero-sum game, adding that adult training helps people adapt mid-career as AI reshapes the workplace. Kate Shoesmith of the British Chambers of Commerce said the best way to encourage youth apprenticeships is to cut the wider costs of doing business. Ben Rowland, chief executive of the Association of Employment and Learning Providers, said changes that are too abrupt or too quick endanger the system.
Joe Dromey, general secretary of the Fabian Society, said the current system is skewed towards funding older, often already highly qualified workers. "These will not be easy decisions, and some will be unpopular with businesses," he said.
A government spokesperson said the focus is on reversing a 40% decline in young people starting an apprenticeship, backed by £3.3bn for 50,000 additional apprenticeships and a £2,000 hiring payment for SMEs taking on a 16- to 24-year-old. The Milburn review is due in the autumn, and the government will not pre-empt its findings.
Source: The Guardian