Employers Fight Plan to Charge More for Training Workers Over 25

Some of Britain's biggest employers are objecting to a proposal that would raise what firms pay to train workers over 25. The plan would change how apprenticeship money is spent in England, and business groups say it could end up costing young people the jobs it is meant to create.

Under the proposal, which has not been finalised, money from the growth and skills levy would cover the full cost of training an apprentice under 25. For workers over 25, that levy money would pay 75% of the cost and employers would find the remaining 25% elsewhere. The growth and skills levy raises £4bn a year for the national apprenticeship system. Ministers have not said when a decision will be made.

The plan was drawn up before Wednesday's budget and is expected to appear in the government's response to Alan Milburn's review on youth employment. Chancellor John Healey is expected to announce measures to widen opportunities for young people. About 1 million people aged 16 to 24 are not in education, employment or training. Over-25s hold more than half of new apprenticeship enrolments.

Robert Halfon, a former Conservative skills minister and now executive director of policy at Make UK, said the change "will just mean opportunities are shifted around instead of creating new ones." He urged the chancellor to "break the cycle" of cutting and reallocating the apprenticeship budget, and to grow the number of places instead. John Foster of the CBI said: "We can't make skills a zero-sum game." Ben Rowland of the Association of Employment and Learning Providers cautioned that abrupt changes could endanger employer support, and Kate Shoesmith of the British Chambers of Commerce said cutting business costs would do more for youth apprenticeships.

The proposal arrives as Labour's youth skills record faces questions. The foundation apprenticeship scheme enrolled 160 young people in its first eight months against an ambition of 30,000 starts over the current parliament. Joe Dromey of the Fabian Society said tackling youth unemployment "means making difficult choices about where public funding is spent." A government spokesperson pointed to £3.3bn to deliver 50,000 additional apprenticeships and a £2,000 hiring payment for small and medium-sized firms that take on a 16- to 24-year-old, and said the Milburn Review is due in the autumn.

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