Fund 100,000 young apprenticeships: calculation note

Central fiscal result

+£0.5bn - Net fiscal impact in 2028-29

Low case: -£0.2bn. High case: +£1.5bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Model 100,000 additional 18-21 apprenticeships by 2028-29.
• Central cost assumes £5,000 average support before offsets.
• Baseline uses DfE apprenticeship starts and participation.
• First Job Bonus is modelled separately.

Affected population

• Affected population is young apprentices and participating employers.
• Direct count is 100,000 additional starts in central case.
• Indirect exposure includes training providers and competing workers.
• Completion rates determine longer-run benefits.

Gross impact

• Gross support: 100,000 x £5,000 = £0.5bn.
• Central offsets are small in the first year.
• Low case assumes wage and benefit offsets exceed admin costs.
• High case assumes lower additionality and higher provider costs.

Fiscal build-up, central case

• Apprenticeship support payments: +£0.5bn
• Training administration: +£0.1bn
• Tax and benefit offsets: -£0.1bn
• Provider capacity costs: £0.0bn

Central net impact: +£0.5bn in 2028-29.

Behaviour and pass-through

• Low case assumes high additionality and quick employment offsets.
• Central case assumes moderate additionality and completion rates.
• High case assumes deadweight and provider capacity costs.
• Employers may substitute subsidised apprentices for other entry-level staff.
• Productivity gains are not scored as near-term fiscal savings.

Phasing

• 2026-27: +£0.1bn. Preparation or partial implementation.
• 2027-28: +£0.4bn. Main ramp-up year.
• 2028-29: +£0.5bn. Target-year central estimate.
• 2029-30: +£0.5bn. Continuation at steady-state assumptions.

Main source groups

• Conservative Party, "Conservatives pledge to cut student loan interest" (2026): Used to define the pledge wording, policy scope and implementation scenario being modelled.
• Department for Education, "Apprenticeships, academic year 2025/26" (2026): Apprenticeship starts reached 226,620 in August-January 2025-26, with under-19s 23.6% of starts; anchors the scale of a 100,000-place expansion.
• Department for Education, "Apprenticeships, academic year 2024/25" (2026): There were 353,500 apprenticeship starts in the 2024-25 academic year; cross-checks the feasibility of adding 100,000 places.
• Office for Budget Responsibility, "Economic and fiscal outlook: March 2026" (2026): The OBR forecast sets the macro, borrowing and receipts baseline used for broad fiscal context; prevents treating tax cuts or spending changes as self-financing.
• Wolter and Ryan, "Apprenticeship" (Handbook of the Economics of Education, 2011): Apprenticeships can raise skills when employer incentives and training quality align; relevant to subsidies for young apprenticeships.
• Dearden, Reed and Van Reenen, "The Impact of Training on Productivity and Wages" (Journal of Political Economy, 2006): Training is associated with productivity gains that can exceed wage gains; relevant to apprenticeship productivity assumptions.
• Conservative Party, "Our Plan for Britain" (2026): Used to define the pledge wording, policy scope and implementation scenario being modelled.