Older Worker Training Plan Faces Business Backlash

Published: 26 October 2026. The English Chronicle Desk. The English Chronicle Online

Britain’s largest employers have warned the government that plans to make workplace training more expensive for older workers could undermine efforts to tackle the country’s growing youth employment crisis, as ministers prepare a major overhaul of the apprenticeship funding system.

The proposed changes, which are expected to form part of the government’s response to a review into youth unemployment, would alter how employers can use money from the growth and skills levy. Ministers are considering increasing the financial burden on businesses that use apprenticeship funding to train workers aged 25 and over, with the aim of redirecting more resources towards younger people entering the labour market.

The proposal comes at a time when the government is under increasing pressure to respond to the number of young people who are not in education, employment or training. Around 1 million people aged between 16 and 24 are estimated to fall into that category, creating concerns about long-term unemployment, lost earnings and the wider economic consequences of young people struggling to establish themselves in the workforce.

The government is expected to announce measures alongside the upcoming budget designed to expand opportunities for young people. Ministers have repeatedly highlighted the decline in youth apprenticeship participation and have indicated that the existing system needs to be rebalanced to provide stronger support for those at the beginning of their careers.

Under the proposal being considered, employers would be able to use the levy to cover the full cost of apprenticeship training for workers under the age of 25. For older workers, however, businesses could be required to contribute a portion of the training cost themselves.

The proposed co-investment arrangement would mean levy funding covering 75% of the cost of training an older worker, leaving employers responsible for the remaining 25%. The plan has not yet been finalised, meaning the precise details could still change before ministers announce their wider reforms.

The prospect of such a change has prompted concern among business groups, which argue that training older workers is not necessarily in competition with creating opportunities for young people. They warn that forcing employers to spend more on adult training could instead reduce the overall amount of workplace training available.

Robert Halfon, a former Conservative skills minister and now executive director of policy at manufacturing organisation Make UK, said businesses supported the objective of helping young people into employment but questioned whether making older-worker training more expensive would achieve that goal.

He argued that simply shifting opportunities from one group of workers to another would not necessarily increase the overall number of training opportunities. Instead, he called on the government to expand the apprenticeship budget and create more opportunities across the labour market.

The debate reflects a broader disagreement over how Britain should use limited public funding for skills development. Supporters of the government’s approach argue that the apprenticeship system has become too heavily weighted towards older workers, many of whom already possess significant qualifications or workplace experience. They believe greater emphasis should be placed on young people who are struggling to obtain their first meaningful foothold in employment.

Critics, however, argue that the modern labour market requires workers to retrain throughout their careers. Technological change, artificial intelligence and shifting industrial needs are making continuous skills development increasingly important, meaning policies that discourage employers from training established workers could create problems of their own.

John Foster, chief policy and campaigns officer at the Confederation of British Industry, warned against treating skills development as a zero-sum contest between younger and older workers. He said adult training remained important both for opening up entry-level opportunities and for helping workers update their skills during their careers.

The argument is particularly relevant as businesses face rapid technological changes. Artificial intelligence is already transforming tasks and job roles across industries, increasing the pressure on workers to acquire new technical and professional capabilities. Employers may need to retrain experienced workers rather than simply replace them with younger recruits.

The Association of Employment and Learning Providers has also warned ministers against making abrupt changes to the apprenticeship system. Its chief executive, Ben Rowland, said employers needed to be involved in the process and cautioned that reforms introduced too quickly could put the wider system at risk.

Business organisations have been pressing the government for greater support as companies face higher operating costs and uncertainty linked to international economic conditions. They have also urged ministers not to introduce further measures that increase the cost of employing staff at a time when many businesses are already under financial pressure.

The British Chambers of Commerce has argued that employers need flexibility to invest in skills at every stage of a person’s career. Its director of policy and insights, Kate Shoesmith, said the most effective way to increase youth apprenticeships would be to make it easier and more affordable for businesses to recruit young people, rather than creating additional barriers to training older employees.

The controversy comes against a backdrop of concern over the government’s broader youth skills strategy. Labour has set an ambitious target for expanding apprenticeship opportunities, but its foundation apprenticeship scheme has so far recorded only a small number of enrolments. Just 160 young people had entered the scheme during its first eight months, despite a government ambition of reaching 30,000 starts during the current parliamentary term.

That gap between ambition and early participation has increased pressure on ministers to demonstrate that their reforms can deliver tangible results.

Youth unemployment is particularly significant because difficulties entering the workforce early in life can have lasting economic and social consequences. Young people who remain outside education, employment or training for extended periods can lose opportunities to develop professional experience, build networks and establish financial independence.

The government therefore sees expanding apprenticeships as an important part of its response. Apprenticeships can provide young people with practical experience while allowing employers to develop workers according to the needs of their industries.

However, the challenge is not simply increasing the number of apprenticeship places. The quality of training, availability of suitable employers and ability of young people to access opportunities are equally important. Business groups argue that employers will be less willing to expand apprenticeship programmes if they face higher costs or a more complicated funding system.

The Fabian Society has taken a somewhat different position, arguing that the current apprenticeship system has become disproportionately focused on older and often already highly qualified workers. Its general secretary, Joe Dromey, said difficult decisions would be necessary if the government was serious about tackling youth unemployment.

That argument highlights the central policy dilemma facing ministers. Public funding for skills development is limited, while the demand for training is potentially unlimited. Redirecting money towards younger workers could increase the number of apprenticeships available to people entering the labour market, but doing so could also reduce opportunities for older workers seeking to change careers or adapt to new technologies.

The government has already committed substantial funding to its youth apprenticeship ambitions. Ministers say reforms backed by £3.3bn are intended to deliver 50,000 additional apprenticeships for young people. The government has also introduced a £2,000 hiring payment for small and medium-sized businesses that recruit apprentices aged between 16 and 24.

Those measures are intended to reduce the financial barriers facing smaller employers and encourage them to create opportunities for young people. SMEs are particularly important to the apprenticeship system because many operate in sectors where practical training and entry-level recruitment are central to workforce development.

Yet business leaders believe the wider cost of employing staff must also be addressed if ministers want companies to recruit more young workers. They argue that employers are already dealing with increased wage bills, employment costs and economic uncertainty, making additional financial pressures potentially counterproductive.

The government has not confirmed that the proposed 25% increase in training costs for workers over 25 will definitely be introduced. A government spokesperson said ministers were committed to reversing the decline in youth apprenticeship starts and providing young people with the skills needed to succeed.

The government also stressed that the review into youth unemployment was due in the autumn and that ministers would not pre-empt its findings.

The final shape of the reforms could therefore depend on the conclusions of that review and the government’s wider budget decisions. Ministers will have to balance the need to improve youth employment with the equally important requirement to ensure that Britain’s existing workforce can continue to develop its skills.

For employers, the issue is ultimately about whether the apprenticeship system can expand without narrowing access to training elsewhere. For young people, the success of the reforms could determine whether the government’s promises translate into genuine opportunities to enter the workforce.

The debate is likely to continue as ministers prepare to announce their plans. At its heart is a difficult question for Britain’s labour market: how can the government give young people a stronger start without reducing the ability of older workers to adapt, retrain and remain productive in an economy undergoing rapid technological and economic change?

The answer could shape not only the future of apprenticeships but also Britain’s ability to address its youth employment problem while maintaining a workforce capable of meeting the demands of the next decade.