Employers’ groups have rounded on the government over its decision to scrap the Home Computing Initiative, announced in the Budget last week.
The CBI said the move would undermine attempts to boost computer literacy and damage the longer-term competitiveness of the UK.
Under the terms of the initiative employees could take out tax-free loans from their companies to effectively buy home computers.
More than half a million households have taken part since its launch in 2004 but the scheme will close on 6 April.
The government said it now wishes to focus support on groups with the poorest access to technology.
Des Browne, chief secretary to the Treasury, said: “The home computer initiative was never intended to subsidise those who can already afford computers.”
He added that people had begun abusing the scheme by buying second computers and games consoles.
But CBI director-general Sir Digby Jones said in a letter to the chancellor, Gordon Brown, that companies will want to know why they have been given just two weeks to work out what to do with their schemes.
“Even the Department of Trade and Industry was in the process of setting up its own HCI scheme and the chancellor’s decision was as much of a shock to the DTI as everybody else,” he said. “Any fear of abuse of the scheme is not a reason to abolish it, but a reason to consult with employers to stamp it out.”
Gordon Brown said the abolition of the initiative will recoup the Treasury about £150m by 2008-9, but the CBI argues that this is a price well worth paying to help build a more computer literate society.
“It is difficult to square off the saving to the Exchequer with the commitments in the Budget speech to invest in re-skilling workers, the creation of a future-proof skilled flexible workforce, facilitation of better education and making a reality of second chances in education for all ages,” said Jones.
The HCI Alliance, whose members are BT, Intel and Microsoft, urged the government to reconsider its decision.
Vivien Quinn, alliance director, said: “The abolition of the scheme will be viewed as an enormous loss by employers and employees alike.”
Official figures show that more than 1,250 employers now have established schemes – three times more than in 2004 – and many more were in the process of setting them up.