Apprentices will receive a 31p-an-hour minimum wage increase next April – the smallest percentage rise in the rate since 2021, the chancellor announced in today’s budget. John Healey has accepted the Low Pay Commission’s recommendations to raise the apprentice rate by 3.9 per cent, from £8 to £8.31 an hour, from 1 April 2027. The increase is smaller than the 6 per cent rise introduced this April and the 18 per cent uplift in 2025. The rate was increased by 21 per cent in 2024. The rate is the minimum that must be paid to all apprentices aged under 19 and to those aged 19 or over during the first year of their apprenticeship. Older apprentices who have completed their first year must be paid at least the minimum wage for their age. The same £8.31 rate will apply to non-apprentice 16 and 17 year old workers. The minimum wage for 18 to 20 year olds will increase from £10.85 to £11.27, while the national living wage for workers aged 21 and above will rise from £12.71 to £13.21. All four rates will increase by 3.9 per cent. In recent years, younger workers have seen their minimum wage rates rise faster than adults. The Treasury estimated the increase across the workforce will benefit around 2.3 million workers. Higher apprentice wages have prompted debate over whether young people are being priced out of apprenticeships, particularly in small businesses. It also comes ahead of Alan Milburn’s long-awaited final inquiry report on tackling youth unemployment, which is expected in November. During his budget speech in the House of Commons, Healey said the government will respond to Milburn’s report by the end of the year and introduce a white paper “early in 2027” with legislation to follow. ‘Savings’ to fund extra apprenticeship brokerage pilots The chancellor also confirmed today the government is providing an extra £100 million across 2027-28 and 2028-29 to expand mayoral apprenticeship brokerage pilots to 14 mayoral strategic authorities across England. Ministers last year allocated an initial £140 million, to be funded from the Department for Work and Pensions’ annual apprenticeship budget, to fund the pilot in seven areas. This appears to be the first time growth and skills levy funds will be used to fund initiatives beyond training and incentives. But Healey, who first revealed more cash was on its way to extend the “football scouts for apprenticeships” scheme at Labour’s party conference last month, said today that the additional £100 million would be funded from “savings from welfare fraud and error”. This suggests that only part of the £240 million total pot for local apprenticeship brokerage services will come from England’s annual apprenticeship budget. FE Week has asked the government to clarify the position. Union Learning Funding returns The budget also confirmed £15 million a year from financial year 2027-28 to restore the union learning fund, which will provide grants to union-led projects that support workers retrain and develop skills. FE Week reported in September that Healey intended to revive the scheme, which the Conservatives scrapped in 2021. Before its abolition, it funded union learning representatives to help workers access education and training, often through existing providers. The Treasury’s costings put the fund’s fiscal cost at £20 million in both 2027-28 and 2028-29, £5 million a year higher than the programme budget. The document does not explain the difference. Youth employment schemes The government’s existing youth employment and skills programmes were costed at £665 million over the next two years, with £290 million allocated in 2027-28 and £375 million in 2028-29. The previously announced measures include £3,000 grants for employers hiring unemployed 18 to 24-year-olds, £2,000 payments for smaller businesses recruiting young apprentices, and an expansion of the jobs guarantee to 22 to 24-year-olds. Separate Treasury policy costings reveal ministers expect the jobs guarantee expansion to save £60 million in universal credit payments over two years, including £25 million in 2027-28 and £35 million in 2028-29. The savings are based on lower benefit payments to young people entering subsidised employment. The Treasury’s calculations also assume some participants will leave their jobs before completing the full six months. The national jobs guarantee rollout is due to begin in November, offering eligible 18 to 24-year-olds who have spent 18 months on Universal Credit a fully funded six-month job. Last week the government announced 12 organisations, including Leeds College of Building, have been selected to run the scheme across 25 areas. HE franchise crackdown savings The Treasury expects to save almost £1 billion over six years through its crackdown on higher education franchising. Budget costings forecast savings of £200 million in 2028-29, rising to £225 million by 2031-32, with £100 million in savings expected before the new rules take effect. Providers teaching 300 or more students on behalf of universities will have to register with the Office for Students from September 2028 for their courses to remain eligible for student finance. The reforms follow concerns about fraud and poor-quality provision amid a rapid expansion of franchised higher education. FE colleges and sixth-form colleges are exempt from the additional registration requirement.