Make UK and CBI warn apprenticeship levy change adds cost for training over-25s

Business leaders have told the UK government that a proposed change to the apprenticeship levy will increase expenses for firms training workers over the age of 25.

The proposal would require employers to cover 25% of the cost for an older apprentice, with levy funds covering only 75% of the expense. This change would apply to training in England and is expected to be part of the response to the Milburn review on youth unemployment. Ministers aim to rebalance the system, which currently sees workers over 25 account for more than half of new apprenticeship enrolments.

Robert Halfon, executive director of policy at Make UK, argued that the plan shifts opportunities rather than creates new ones. He stated that making it more expensive for employers to train older workers is not the solution to the youth jobs crisis. Halfon urged Chancellor John Healey to use the budget to grow the number of available apprenticeships rather than restrict training for adults.

John Foster, chief policy and campaigns officer at the CBI, warned that skills funding cannot be treated as a zero-sum game. He noted that adult training plays a vital role in helping workers adapt to changes in the workplace, particularly as artificial intelligence reshapes job requirements. Foster said that while supporting young people who are not in education, employment or training is right, adult training must not be neglected.

The government is facing pressure to address the 1 million 16 to 24-year-olds who are not in education, employment or training. Andy Burnham has made youth jobs a central part of his agenda, including plans to reverse a 40% drop in youth apprenticeship starts over the last decade. The government has already committed 3.3 billion pounds to deliver 50,000 additional apprenticeships for young people and to provide 2,000 pounds per hire for small and medium enterprises taking on an apprentice aged 16 to 24.

Ben Rowland, chief executive of the Association of Employment and Learning Providers, said that changes to the system must bring employers along to avoid danger to the process. Kate Shoesmith, director of policy and insights at the British Chambers of Commerce, said that employers need flexibility to invest in skills at every stage of a career. She added that the best way to encourage youth apprenticeships is to reduce the wider costs of doing business rather than creating new barriers to training.

A government spokesperson said the focus is on reversing the decline in young people starting apprenticeships. The spokesperson noted that the Milburn Review is due in the autumn and that the government will not pre-empt its findings. The proposed change is not yet finalised and is expected to form part of the response to the review.