A proposed overhaul of England’s apprenticeship funding could make it more expensive for employers to train workers over 25. The aim is to redirect support toward young people, including the 1 million 16- to 24-year-olds across the country who are not in employment, education or training.
The Guardian reports that major business groups support the youth-employment objective but warn against treating apprenticeship funding as a zero-sum system. Their central concern is that shifting money from adult training may restrict existing opportunities without expanding the total number of places.
The reported proposal would:
- Raise the employer cost of training a worker over 25 by 25%.
- Have levy funds cover 75% of training costs for older apprentices.
- Allow employers to use their levy contributions to fund the full cost of training an apprentice under 25.
- Make it harder for some employers to offer adult training unless more apprenticeship places are created.
What the proposal would change
The reform is part of the government’s response to Alan Milburn’s review of why so many young people are unemployed. Chancellor John Healey was expected to announce measures to improve opportunities for young people during the budget.
Under the version reported, employers could draw on their Growth and Skills Levy contributions to cover the full cost of training apprentices under 25. For workers over 25, levy funding would cover 75% of the costs, with employers providing the balance separately. The levy is a £4 billion-a-year tax supporting the national apprenticeship system.
The policy reflects a clear imbalance. Workers over 25 account for more than half of new apprenticeship enrollments, while youth apprenticeship starts have fallen by 40% over the past decade. Ministers want more funding and opportunities to flow toward younger workers.
| Reported funding treatment | Apprentice under 25 | Apprentice over 25 |
|---|---|---|
| Growth and Skills Levy contribution | Could cover the full employer cost | Would cover 75% of training costs |
| Employer contribution | Contribution from the employer’s levy funds would fund the full cost | Employer would need to cover the remaining 25% separately |
| Policy objective | Make youth apprenticeships more affordable | Reduce the relative cost advantage of training older workers |
| Main criticism | Funding may be redirected rather than increased | Adult training could become harder to sustain |
Why employers are pushing back
Robert Halfon, executive director of policy at Make UK, argues that the proposal would shift opportunities rather than create them. His immediate concern is that businesses may respond to higher adult-training costs by doing less training overall.
That matters because adult apprentices are not simply taking places that could have been reserved for young people. The CBI says adult training helps employers open entry-level routes and allows workers to adapt their skills as technology changes, including as AI reshapes the workplace.
The Association of Employment and Learning Providers raises a second problem: employers must be brought along as the system changes. A sudden or rapid shift could undermine participation if businesses view apprenticeship rules as unstable or increasingly expensive.
The British Chambers of Commerce wants the government to make youth apprenticeships easier to take on by reducing wider business costs instead. Its argument is not that adult training should take priority, but that a new levy barrier may discourage employers from hiring apprentices at all.
The underlying trade-off is therefore sharper than it first appears. The government is trying to improve the age balance of apprenticeships, but the employers it needs to deliver more places are warning that higher costs could shrink participation.
Why it matters for the youth jobs strategy
The scale of the challenge makes a meaningful expansion of apprenticeships harder to achieve. Just 160 young people enrolled in Labour’s foundation apprenticeship scheme during its first eight months, while ministers have set an ambition for 30,000 starts during the current parliament.
A funding rule could help direct resources toward that target, but it cannot guarantee additional places. If levy support merely moves from older apprentices to younger ones, employers could train more under-25s while reducing their overall apprenticeship numbers.
That makes the final design and employer response more important than the headline percentage change. The government wants to reverse the decline in youth apprenticeship starts, but business groups want the reform to increase total capacity rather than alter only the age mix.
The proposal is also not yet final. Its success will depend on whether employers see a credible route to more apprentice vacancies, not simply a different distribution of levy support.
Who should care
Young people seeking employment:** The policy could lower the cost of apprenticeship opportunities if employers respond by creating more under-25 places. The benefit depends on those additional vacancies actually being available.
Adult workers considering reskilling:** Higher employer costs may make it harder to secure levy-funded training after the age of 25. People exploring a career change may need to establish who will fund the course and whether the training is linked to a role employers already need filled.
Employers:** Businesses that train large numbers of older workers face the most direct change. Those recruiting young apprentices may benefit, but only if the new rules do not discourage overall participation in the apprenticeship system.
Government and training providers:** The decisive issue is whether public support produces more opportunities, higher completion and stronger employer engagement rather than a simple redistribution between age groups.
What to watch in the budget
The first test is the final funding language: whether the under-25 arrangement remains as reported and how clearly the additional employer cost for older apprentices is defined.
The second is the number of apprenticeship places. Ministers need to show that more funding for young people corresponds to more available positions, not merely a smaller share for adults.
The third is employer participation. Training providers have warned that abrupt changes endanger the system, making the response from businesses that currently use apprenticeships a crucial indicator.
The final test is value for money. If the reforms increase apprenticeship starts without reducing adult participation, they could widen opportunity. If they simply train a different age group while the total remains flat, employers will have identified the weakness in the approach.
Key takeaways
- The reported proposal would use levy rules to shift apprenticeship support toward workers under 25.
- Employers argue that adult training supports entry-level hiring and workforce adaptation, making funding a zero-sum risk.
- The decisive test is whether total apprenticeship capacity and employer participation increase.
- The government faces an additional challenge: only 160 young people enrolled in its foundation apprenticeship scheme during its first eight months.
- Career changers should clarify who will pay before committing to an adult apprenticeship route.
Frequently asked questions
How would the proposed apprenticeship funding change work?
Employers could use their Growth and Skills Levy contributions to fund the full cost of an apprentice under 25. For apprentices over 25, levy funding would cover 75% of training costs, with the employer covering the remainder separately.
Why do employers oppose the change?
They fear it will restrict adult training without creating enough additional places. Employers also want greater flexibility and support to invest in skills at every stage of a worker’s career.
Who is most directly affected by the reported plan?
Employers training workers over 25 face the clearest cost increase. The policy is intended to make youth apprenticeships more affordable and support more opportunities for younger workers.
What should career changers ask before starting an apprenticeship?
Ask who will pay, what total cost applies, what role follows the training and whether the employer can use the levy or another programme to support the course.
What would determine whether the reform succeeds?
Watch for more apprenticeship places, stronger participation by employers and evidence that support for younger workers expands opportunities rather than simply replacing adult training.