Training subsidy cuts `will hamper business on skills'

THE GOVERNMENT has been warned that cutting training subsidies could hamper businesses' efforts to increase workers' skills. Industry raised concerns after ministers decided to cut the budget for vocational training in schemes run at work under franchise agreements with further education colleges.

Pressure from business mounted after evidence was given to the House of Commons Select Committee on Education on Wednesday. The subsidy for courses run on employers' premises will be cut by 25 per cent from August.

The move could end up costing firms around pounds 20m if they pay for the training the Government would have funded. Companies that train through franchising agreements with colleges currently get 75 per cent of the cost paid for by the Government.

Chris Ripper, chairman of the Training Panel of the Brewery and Licensed Retail Association, said subsidies helped persuade firms that they could afford training.

He did not know how the cut would affect his company, Scottish and Newcastle Retail, but was concerned that it could alter the way training was carried out.

He said the move could hamper the Government's efforts to encourage people to learn throughout their lives, he said. Companies would come under pressure to stop paying for national qualifications run with colleges.

A Department of Education and Employment spokeswoman said ministers wanted to reach a better balance of responsibility for training with employers.