Student Initiatives: A-level examination fees scrapped for under-25s

Young people will be able to sit A-levels up to the age of 25 for free as a result of the Budget.

The move, costing £25m, is designed to give all those who struggle at school a "second chance" to boost their education. Earlier this week a think-tank report revealed that the number of youngsters dropping out of full-time education or training at 16 had soared by a third in the past decade.

Around 75,000 (12.6 per cent of the age group) now quit school - making the picture even bleaker than when the UK came 27th out of 29 industrialised countries in a survey of staying-on rates.

Under Chancellor Gordon Brown's plans unveiled yesterday, though, they will all be entitled to sign up for free courses up to the A-level standard. At present, they have to pay fees after they reach the age of 19. It would be paid for by a cash boost to further education colleges - and extra grants to pay for their living costs.

The move was welcomed by college leaders last night. Dr John Brennan, chief executive of the Association of Colleges - which represents further education and sixth-form college principals - said: "Many young people finding their educational feet in colleges will take more time to reach A-level or equivalent standard.

"Colleges have been very concerned at having to charge such students for their courses as soon as they reach the age of 19 - so it is great news that colleges will be able to waive fees."

The scheme will boost the budget to £7bn by 2008, with an additional £500mcapital investment for colleges to improve building stock.

David Willetts, the Conservatives' education spokesman, said: "There are still too many school leavers who need a second chance. The source of the problem is the failure to deliver a good education first time round."

Barry Lovejoy, head of colleges at NATFHE, the university and college lecturers' union, said the reforms would be undermined by the lack of investment in staff - which was already leading to more redundancies and persistent low pay. "NATFHE has just rejected a pay offer of 1.5 per cent for lecturers which our employers reported was determined by funding uncertainty in colleges," he said. "If the money isn't there, changes such as workforce development simply won't happen."

Yesterday's Budget also unveiled a £40m package aimed at retraining low-skilled women workers to offer them better career opportunities.

In addition, there will be a £3m investment in media projects - designed to help youngsters who want a career in the media. The money will help them to set up projects such as launching their own community radio stations.

The Chancellor also put the spotlight on higher education with the announcement the Government was funding new partnerships with India, Russia, South Africa and China - with the view to trebling the take-up of UK-run degree courses abroad and links with British universities. A spokesman for the Department for Education and Skills said: "There is a growing need for greater international links in education."

In addition, the Government is relaxing restrictions on employment of international postgraduate students so they can take up jobs in shortage areas for up to a year after graduating.

Baroness Warwick, chief executive of Universities UK, which represents university vice-chancellors, said she particularly welcomed the opportunity for overseas graduates to work in shortage areas for a year. "We look forward to urgent discussions with Government to clarify the categories of shortage areas covered by this provision."

* Treasury Budget site

* Chancellor's Statement in full