‘You can’t subsidise people into jobs that don’t exist’, as hospitality assesses £725m reform

A sweeping UK Government reform pledging 50,000 more apprenticeships has put hospitality centre stage, promising fresh routes into work for young people. Yet industry leaders warn that without meaningful support for struggling businesses, the scheme risks unravelling.

The Government has announced a £725 million reform of the apprenticeship system intended to expand opportunities for young people and support sectors in acute need of new talent. Central to the package is a commitment to deliver 50,000 additional apprenticeships and foundation apprenticeships over the next three years, particularly in hospitality and retail.

As per the Department for Work and Pensions, the Government will cover the full training cost of apprentices under 25 at small and medium-sized businesses, removing the current 5% co-investment rate. Officials say this will open up thousands of places for young people while easing financial strain on smaller employers.

Short courses and new pathways from 2026

From April 2026 a suite of short courses in areas including digital skills and AI will be introduced, broadening training options and giving businesses more flexibility. A new Level 4 apprenticeship in AI will also be added to support employers looking to develop specialist capability.

For hospitality, the arrival of foundation apprenticeships marks a shift toward structured early career entry points in a sector long powered by on the job learning.

Parity between apprenticeships and university

Prime Minister Keir Starmer said the reforms form part of his ambition for two-thirds of young people to participate in higher-level learning. He argued that for too long success has been judged only by university entry and stated, “If you choose an apprenticeship, you should have the same respect and opportunity as everyone else.” He framed the £1.5 billion Youth Guarantee and Growth and Skills Levy as a defining cause for his government.

Work and pensions secretary Pat McFadden added, “Every young person deserves a fair chance to succeed. When given the right support and opportunities, they will grasp them.” He described the funding as a down payment on future careers with a promise of real pathways into good jobs.

Hospitality welcomes recognition of its role

Kate Nicholls, chair of UKHospitality, said the inclusion of hospitality within the new foundation apprenticeship framework represents “clear recognition within the Government’s skills policy that hospitality is a vital employer of young people and key to getting people of all ages into employment offering rewarding work vital core skills and swift career progression.” She added that the sector will work with the Government on the rollout of the changes.

Nightlife warns of contradictions

However, the mood shifts after dark. Michael Kill, chief executive of the Night Time Industries Association, delivered a starkly different assessment. He argued that “the Government’s announcement of £800 million to tackle youth unemployment risks missing the point entirely if the businesses that create jobs are being priced out of existence. You cannot subsidise people into jobs that no longer exist.”

He raised concerns that rising wage costs, higher taxes and increased regulatory pressures have already led to closures across hospitality, nightlife and the visitor economy. As reported by the NTIA he said that without direct support to reduce the cost of employment and restore commercial viability political promises are at odds with economic reality.

The Government’s intention is clear: to modernise skills, widen access and bring parity to apprenticeship pathways. Hospitality’s response is equally clear. While the sector welcomes structured training and funded entry routes it remains anxious about its capacity to absorb new apprentices while trading conditions remain strained.

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