The newly launched National Modern Apprentice Taskforce must address the funding shortfall companies face if they take on older apprentices, according to the Engineering Employers' Federation (EEF).
Ian Peters, EEF director of external affairs, said it is vital that funding for modern apprentices aged 19 and above be improved if the taskforce is serious about helping to address skills shortages.
At present, employers receive £14,560 in funding for 16-18-year olds to cover part of the £50,000 cost of taking on modern apprentices, but only about half this figure for 16-18-year-olds and there is no funding assistance at all for over 24s.
Peters said that this lack of funding curtails the number of over 19-year-olds who can be supported on modern apprenticeships and is a barrier to improving workplace skills.
He also believes the Government's target of getting 28 per cent of young people in an apprenticeship by the age of 22 by 2004 is unreachable, unless funding arrangements change.
"If the taskforce does only one thing, it should be to persuade the Government to put funding for those modern apprenticeships over the age of 19 on an equal footing with those aged between 16 and 18.
"The total number of starters in training on Modern Apprentices programmes is steadily declining at a time when we need to grow the apprentice population from 6,500 starters in England Scotland and Wales to 10,000 by 2005," said Peters.
The National Modern Apprenticeship Taskforce, which was launched 10 days ago to promote their use by industry, will be led by Sir Roy Gardner, chief executive of Centrica and includes individuals from across industry and the education and training sector.