Ryan FowlerSMEs are warning that rapid increases to the apprenticeship national living wage are making it increasingly difficult to sustain training programmes, with many employers cancelling or scaling back schemes. The concerns follow a 66% rise in the apprentice rate in just two years, rising from £6 per hour in 2023 to £10 in 2025.
The pressure comes amid wider cost increases linked to recent tax and wage changes. Business leaders argue that the cumulative impact has contributed to some of the highest levels of closures in three decades, with apprenticeship programmes emerging as one of the most affected areas. The number of apprenticeship places has already fallen sharply, with 170,000 fewer in 2024 compared with 2014.
Chris Houston, managing director of Tadweld, said apprenticeships had long been viewed as an investment, with trainees spending much of their time in training or at college.
He explained: “In 2023 the minimum wage for an apprentice welder was £6/hour. Whilst that may seem low, apprentices attend college one day per week and we pay them for that time too.
“They’re in training for most of the time they are with us, working alongside a skilled fabricator, so we’ve always seen apprentices as an investment rather than an employee able to produce high volumes of work.
“However, in 2024 the apprentice NLW increased to £7.50/hour, and then in 2025 it increased to £10/hour. That’s a staggering 66% increase in 2 years. In 2026, NMW for under 18’s will increase again to £10.85 which makes offering apprenticeships exceptionally expensive.”
Although training costs are supported through the Apprenticeship Levy, employers argue that policymakers have overlooked the significant employment and supervision expenses carried by businesses. They say the sharp increases have undermined affordability, particularly for SMEs.
Alan Pickering, managing director of Unison in Scarborough, said recent changes had forced the firm to suspend its long-running scheme.
He commented: “We’ve run an apprenticeship program here at Unison for over 25 years and are very proud of the graduates from it who now hold significant roles in our business.
“This year will be the first year that we won’t make a position available. Unfortunately, the recent changes have made it too expensive to train apprentices, and yet these guys and girls are supposed to be the future of British manufacturing. For someone who is passionate about the industry, it’s incredibly frustrating.”
Houston said the UK risks constraining the supply of critical skills at a time of rising demand. “It seems such a shame that at the point we finally have the next generation more interested in vocational education, that central policy has made it so much harder for businesses to offer apprenticeship places,” he said. Highlighting a projected requirement for 35,000 new welders over the next five years, he noted that only 231 welding apprentices were trained in 2024.
He added: “The maths simply doesn’t work, and government need to evaluate how their collective decisions are currently making this even harder for industry. I’ll be in Westminster myself with the Madein Group on 4th December and organisations like Enginuity and MakeUK are essential in ensuring the manufacturing sector’s collective voice is heard. I look forward to trying to be part of the solution.”
