Britain’s largest employers have told the government that forcing businesses to pay more to train older workers risks damaging its goal to tackle the youth jobs crisis. The Guardian understands ministers plan to overhaul Labour’s apprenticeship funding scheme to increase the cost of training a worker over the age of 25 in England by 25%, to encourage firms to train young people instead. Drawn up before Wednesday’s budget, the proposal, which was first reported last week, is expected to form part of the government response to Alan Milburn’s review into why so many young people are unemployed.
The chancellor, John Healey, is widely tipped to announce measures to bolster opportunities for young people to help the 1 million 16- to 24-year-olds not in education, employment or training (Neet) across the country. However, business leaders urged the government to reconsider the plan to make training older workers more expensive. But making it more expensive for employers to train older workers isn’t the answer,” he added.
Calling on Healey to “break the cycle” of cutting and reallocating the apprenticeship budget in England, Halfon said the system was already struggling to deliver what businesses and young people need. With over-25s accounting for more than half of new apprenticeship enrolments, ministers have been clear they want to rebalance the system towards supporting more younger people. Under the latest proposal, which is yet to be finalised, employers would be able to fund the full cost of an apprentice under the age of 25 using the money they contribute to the growth and skills levy – the £4bn-a-year tax used to fund the national apprenticeship system.
However, for an older worker, they would face a “co-investment rule” whereby levy funds would cover 75% of the costs. The rest would need to be covered separately. Employers have for years been told they were free to spend their levy funds on training as they saw fit.
John Foster, the chief policy and campaigns officer at the CBI lobby group, said: “We can’t make skills a zero-sum game. Anything that is too abrupt or too quick significantly endangers that.” Business leaders have been pressing Healey to use Wednesday’s budget to provide support with soaring costs amid the war in the Middle East, and have urged the chancellor not to add to the pressure on firms after Labour’s increase in employer national insurance contributions. Kate Shoesmith, the director of policy and insights at the British Chambers of Commerce, said: “At a time when businesses are under pressure to improve productivity and drive growth, employers need greater flexibility and support to invest in skills at every stage of a person’s career.
Ministers have an ambition for 30,000 starts over the current parliament. Joe Dromey, the general secretary of the Fabian Society, said that while flexibility was important for business, the current system was skewed too heavily towards funding older, often already highly qualified workers. But tackling youth unemployment means making difficult choices about where public funding is spent.” A government spokesperson said: “It’s right that we focus on reversing the 40% decline in the number of young people starting an apprenticeship and give them the skills they need to succeed.
Extract — continue reading at the source.
