Costlier training for over-25s could undercut England's push on youth jobs
Ministers reportedly plan to raise the cost of apprenticeship training for workers over 25 in England, and large employers warn it could hurt youth jobs goals.
According to the Guardian, ministers in England are planning an overhaul of the apprenticeship funding scheme that would raise the cost of training a worker aged over 25 by 25 percent. The paper reports that the change is intended to encourage firms to take on and train younger people instead.
The Guardian's exclusive reporting says Britain's largest employers have told the government that making businesses pay more to train older workers risks working against its goal of tackling the youth jobs crisis. In the employers' view, a higher price for training existing or mid-career staff could push companies toward fewer training places overall rather than more entry-level ones.
The reporting does not make clear whether the proposal has been finalized, or when any change would take effect. It also does not set out how the government has responded to the employers' objections, so the plan should be treated as under discussion rather than settled policy.
The case highlights a trade-off at the heart of the debate. Policymakers want to open doors for young people who struggle to find work, while employers and workers want continued access to training for adults who need new skills to stay employed or change careers.
Background
Apprenticeships in England combine paid work with structured training and are funded through a mix of government money and employer contributions. Since 2017, larger employers have paid a levy on their wage bills, which they can draw on to pay for approved training. Smaller firms generally contribute a smaller share, with the state covering more of the cost. The system has been revised several times since its introduction, with ministers adjusting which courses qualify, how funds can be spent and how much the government will pay for each training place.
Age has long been a factor in how apprenticeship rules are set. Schemes have traditionally been aimed at school leavers and young adults, while training for older workers has often been treated as a separate question, sometimes with different funding terms. Governments of different parties have argued that public money should be focused where it does the most good, which in practice has often meant prioritizing younger entrants to the labor market.
Youth unemployment has been a recurring concern across the UK and other developed economies. Politicians often describe young people who are not in education, employment or training as a group at risk of long-term disadvantage, because early periods out of work can affect later earnings and career prospects. Employers, meanwhile, frequently say that the skills gap is best closed by investing in people already in their workforces.
Any change to funding rules usually has effects that extend beyond the headline price. Training providers, colleges and businesses often plan courses and recruitment months in advance, so shifts in cost can reshape which programs survive and which employers choose to participate.
Why it matters
This debate touches two groups who are often discussed separately: young people seeking a first step into stable work and older employees who want to keep pace with changing technology and industries. If training for over-25s becomes more expensive for employers, the consequences could fall unevenly, with some firms scaling back development programs and some workers finding fewer routes to retraining.
The employers' objection also raises a practical question about whether the policy would achieve its aim. Encouraging businesses to hire young apprentices depends on companies having the capacity, supervision and confidence to take on new starters. If overall training budgets shrink, firms may decide the safer choice is to avoid expansion altogether.
For the government, the stakes lie in credibility. Youth employment is a visible and politically sensitive issue, and a policy that appears to protect young jobs at the expense of adult learners may invite criticism from both sides. How ministers frame the trade-off, and what evidence they offer, will shape how the plan is judged.
What to watch
The first signal will be whether the government confirms the proposal, changes it or drops it in response to employer concerns. Details such as which programs and sectors are affected would matter greatly, since the impact could vary widely between industries.
Observers should also watch for any published analysis of likely effects on apprenticeship numbers, both for younger people and adults. Reaction from training providers, trade bodies and unions may indicate how widely the concerns are shared across the economy.
Viewpoints
Commentary from our columns: three angles on this story.
The Ledger money and economics
Every funding rule is a price signal, and this one sends a clear message: training an older worker is about to cost employers more than training a young one. Economists would ask a simple question here. Will firms respond by cutting training across the board, or by shifting it toward younger recruits? The answer depends on margins that most companies guard closely. A 25 percent increase is not a rounding error for a business with a tight budget, particularly one that already juggles wages, rent and energy costs. There is also a quieter cost to consider. When training becomes a line item to minimize, it tends to be the first thing trimmed in a downturn, and the workers most likely to lose out are those with the least bargaining power. Governments often hope that small changes to incentives produce large shifts in behavior. Sometimes they do. Sometimes employers simply spend less, and the economy ends up with fewer skills rather than redistributed ones. Before any price changes, ministers should be able to show a credible estimate of how many additional places they expect to create, and how many they risk losing.
The Rulebook law, policy and institutions
Policy like this lives or dies on the detail of its rules. A funding formula can look straightforward in a headline and still produce complicated results once it meets the legal definitions of eligible training, employer size and co-investment. The question for institutions is not only what the rule says, but how it will be applied and reviewed. Is there a clear mechanism for assessing whether the age threshold achieves its purpose? Will there be a route to adjust it if employers and providers find unintended consequences? Good governance also means transparency about the trade-offs. Ministers should explain why they believe encouraging early-career training outweighs the value of supporting mid-career development, and they should set out how success will be measured. Consultation with training providers, unions and sector bodies is not a formality here; it is often where practical problems surface before they become expensive mistakes. A policy aimed at a serious social problem deserves rules that are tested, explained and open to revision.
The Ground Level what it means for ordinary people
Behind every funding formula is a person deciding whether they can afford to change careers, or a young person weighing whether an apprenticeship is a real route into work. For someone in their thirties or forties whose job is shifting under them, a course that suddenly costs their employer more may be the difference between an upgrade and a redundancy notice. For a teenager leaving school, the same policy could mean a first paid job instead of another year of applications. Both situations are real, and both deserve attention. What stands out is how often these debates happen far from the people they affect. Employers describe their budgets, ministers describe their targets, and workers are rarely part of the conversation. Asking how the change would play out in a warehouse, a care home or a small shop would reveal much more than the headline figure does. People who have already lived through a skills gap know that retraining is not a luxury. It is how many of them keep their footing, and any plan that narrows that path should be examined carefully.