Budget measures on apprenticeships spark concern from skills and training experts
Posted by: electime 27th November 2025
Skills and apprenticeship policy has come under sharp focus in the wake of the Autumn Budget, with industry bodies raising concerns about rising wage costs, limited employer support and ongoing uncertainty within the training system. While measures to fully fund SME apprenticeships for under-25s have been welcomed, sector leaders warn that higher employment costs, unchanged funding bands and gaps in long-term strategy risk slowing recruitment and weakening the talent pipeline. Their responses highlight the need for stronger incentives, clearer policy and coordinated investment across education and industry to meet future workforce demands.
Andrew Eldred, Deputy CEO of ECA, commented:
“The recent 6 per cent uplift in the Apprentice Minimum Wage—now nearly 50
per cent higher than in 2024—means the cost of employing apprentices has soared. For many SMEs, it now takes an average of a year longer to see any return on their investment in training new talent.
“This level of Government-imposed wage inflation is unsustainable without urgent counter-measures, through more generous employer incentive payments and/or tax credits for businesses that train.”
ECA has had little real opportunity to input into the Government’s plans for simplifying the apprenticeship system, but is keen to work with Government to alleviate administrative and regulatory burdens for employers, especially SMEs.
Beatrice Barleon, Head of Policy and Public Affairs at EngineeringUK:
“The Autumn Budget arrived at a pivotal moment for skills reform, with the recent post-16 skills white paper highlighting the declining provision of apprenticeships for young people, including in key Industrial Strategy growth sectors.
“The Chancellor’s decision to fully fund SME apprenticeships for young people under 25 – up from age 22 currently – will help to break down barriers to SME participation in apprenticeships. However, government must go further with additional wrap-around support for SMEs. We also welcome the commitment to invest an additional £725m in the Growth and Skills Levy over the next five years, and look forward to seeing further detail ahead of April 2026.
“The government must ensure that this funding uplift is adequately targeted at young people and at filling critical skills gaps within sectors with the greatest employment demand, such as engineering and technology. Many of these are likely to be entry-level apprenticeships. Skills England are forecasting that over a third (34 per cent) of the increased employment demand in the IS-8 sectors over the next decade will be in Levels 2 and 3 occupations.
“To deliver a resilient engineering and technology workforce in the long-term, government must ensure this investment is matched by an equal scale of ambition in the pre-18 education system. It should adopt a joined-up approach to talent development across pre- and post-18 by investing in high-quality STEM education for young people. This should be delivered both through lessons and STEM outreach activities, and ensure young people are informed and inspired through modern careers advice and guidance in schools.”
Chris Claydon, Chief Executive of JTL, said:
“We welcome the Budget’s recognition of the vital role skilled trades play in driving UK growth and net zero ambitions. Fully funded apprenticeships for under-25s and extended support for SMEs are positive steps that give employers confidence to invest in the next generation. It’s also encouraging to see investment in construction and infrastructure, but this must be matched by a skills system that enables businesses to build the workforce needed.
“Rising wage costs and unchanged funding bands mean financial pressures remain, so the real test will be the decisions employers make in the months ahead. As demand grows across housing, retrofit and clean energy, apprenticeships will be critical to meeting future workforce needs. JTL stands ready to work with government and industry to ensure the skills pipeline grows in step with the needs of the economy.”
