Part of the government's £500m recruitment subsidy fund to help the unemployed should be redirected to help fund new apprenticeships, the Confederation of British Industry (CBI) said today, as it warned that youth unemployment is reaching unacceptable levels.

The proposal is part of a five-point plan set out by the business group to help tackle the problem, and is announced ahead of GCSE results on Thursday.

Under the CBI's apprenticeship proposal, £125m of the £500m recruitment subsidy fund to help the unemployed would be used to subsidise 50,000 new apprenticeships. Firms would receive a subsidy of £2,500 on average towards the cost of training each extra apprentice. Firms that have not taken on apprentices previously should be particularly encouraged to do so.


In addition the CBI recommends creating a separate new £25m fund that would be used to encourage firms to train more apprentices than they actually need to improve their prospects elsewhere in the sector. This would replace a previous £11m fund that did this successfully. Other proposed measures include companies providing more internships and work experience for young people.

Richard Lambert, CBI Director-General, said: "Young people leaving education this summer face the toughest job market in a generation. We know from previous recessions that a lack of employment after leaving education can damage young peoples' long-term prospects at a critical point as they move from education to the world of work.

"Young people are being hardest hit by unemployment, and the government must increase the opportunities available to limit its scarring effects.

"Business also needs to support young people by offering more apprenticeships, internships, work experience and mentoring opportunities."

(CD/BMcC)