Plan to make firms pay more to train older workers than youth apprentices in England
Exclusive: Ministers considering overhaul of apprenticeship funding scheme to tackle youth jobs crisis Employers in England are to be forced to pay more to train an older worker than a youth apprentice under plans being drawn up by the government to tackle the youth jobs crisis. The Guardian understands ministers plan to overhaul Labour’s apprenticeship funding scheme to increase the cost of…
The government is considering a significant change to the apprenticeship funding scheme in England to address the youth jobs crisis. Under the proposed overhaul, employers will be required to pay a 25% higher amount to train workers over the age of 25 compared to youth apprentices. This move aims to encourage businesses to invest more in training younger employees, reversing the 40% drop in youth apprenticeship starts over the past decade.
The idea is part of the government's response to Alan Milburn's review on the reasons behind the high youth unemployment rates. Chancellor John Healey is set to include measures to tackle rising youth unemployment in his upcoming budget statement. Currently, more than half of new apprenticeship starts involve workers over 25, while the number of under-19s enrolling has nearly halved in the last ten years.
The new "co-investment" rule is expected to be phased in from September 2027, affecting large employers who contribute 0.5% of their annual pay bill to the apprenticeship levy. While the change is believed to be controversial, as employers have traditionally been free to spend the levy funds as they see fit, it is seen as a necessary step to support young people in accessing apprenticeships.
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