The further education and skills sector has welcomed news that it will be cheaper for employers to take on young apprentices in future.

In his Autumn Statement today, chancellor George Osborne announced that the government would abolish almost all National Insurance contributions for apprentices aged under 25.

This means employers of around half a million apprentices will be exempt from paying the contributions completely when the change comes into effect in April 2016.

Almost two million apprenticeships have been created so far in the current Parliament, and the three main political parties have all pledged to expand the system further after the next election.

Chris Jones, chief executive of vocational education body City & Guilds, said the announcement came as a “welcome surprise”

“It is encouraging to see the government making good on previous promises to support employers to take on more apprentices,” he said. “This will encourage them to invest in young people and reduce the financial and administrative burden of doing so.”

Stewart Segal, chief executive of the Association of Employment and Learning Providers (AELP) said: “It is vital that the government commits to greater investment in the country’s main skills programme and supports employers in their recruitment of apprentices, and we are pleased that ministers have recognised this, knowing that the returns will be excellent.”

He called for the government to go further and extend the exemption to all previously unemployed apprentices taken on by an employer.

Martin Doel, chief executive of the Association of Colleges, said: “Encouraging more employers to offer apprenticeships is important, but the government must work with colleges to ensure that employers are ready to take on apprentices.

“Colleges already work with an average of 700 employers in their local area and they are keen to do more.”

The chancellor’s statement also included loans of £10,000 for under-30s doing taught masters degrees and a £20 million investment to improve careers advice and support for young people. He also outlined measures to support older people who need to retrain, those with mental health issues and those who need access to basic skills training.

However, David Hughes, chief executive of the National Institute of Adult Continuing Education, said it “fell short” in a number of areas.

“The focus on training for young people is vital, but is only one part of the solution,” he said. “The adult skills and community learning budgets, alongside giving adults more control over their learning, need to be a much bigger priority if the government is going to succeed with its long-term economic plan.”

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