Rising costs are forcing a North Yorkshire steelwork firm to cut its apprenticeship intake to the lowest level in a decade.
Tadcaster-based Tadweld says that despite increasing demand for technical apprenticeships, it may have to reduce its intake in 2026 due to higher employment costs, particularly for small and medium-sized enterprises (SMEs).
Chris Houston, managing director of Tadweld, said: "It is incredibly frustrating that, just as young people are showing greater interest in vocational education and technical careers, businesses are finding it harder to offer the apprenticeship places they need.
"The message from young people is clear – they want these opportunities.
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"But for SMEs, the cost of employing and training an apprentice has risen dramatically, and the result is that businesses are being forced to reduce the number of places they can offer."
The warning comes amid a national rise in applications for degree apprenticeships in England, which have quadrupled in three years, according to recent BBC figures.
Chris Houston and the team at Tadweld
(Image: Pic supllied)
Applications through the Government’s central platform have risen from 8,100 to 21,800, while available positions have nearly halved from 7,300 to 3,700 over the same period.
Despite growing interest from young people, Tadweld expects its September 2026 Level 3 engineering apprenticeship intake to be its lowest in 10 years.
The company said rising employment costs, including a 66 per cent increase in the apprentice minimum wage over two years, are making it increasingly difficult for SMEs in the manufacturing sector to offer training opportunities.
Mr Houston said: "We urgently need to close the gap between the demand for apprenticeships and the number of opportunities available.
"If we don't, we risk losing a generation of skilled engineers and welders at precisely the time British industry needs them most."
Tadweld said the issue is not with raising pay for young workers, but with recognising the specific needs of apprentices, who spend a significant portion of their time in structured training.
The company is calling on policymakers to work more closely with SMEs to ensure apprenticeship policies support, rather than limit, businesses that deliver much of the UK's hands-on skills training.
The challenge is particularly pressing in welding, where the UK is projected to need around 35,000 new welders over the next five years.
Yet only 231 welding apprentices were trained nationwide in 2024.
Tadweld said it now faces the "difficult decision" of reducing its intake at a time when the demand for skilled workers is growing.
The company emphasises that while apprentices spend part of their week in college, employers are responsible for paying their wages and covering the costs of training and development.
This financial burden, combined with wider business costs, is making it harder for SMEs to invest in the next generation of skilled workers.