The Enquirer revealed earlier this month that CITB-ConstructionSkills is cutting funding for a three-year apprenticeship programme from £9,820 to £9,000.
Letters confirming the cuts will be sent to contractors next month.
Alan Ritchie, general secretary of Ucatt, said: “The decision to reduce the grants for apprenticeships is short sighted, unnecessary and will harm the industry.
“Most employers already have to be virtually dragged kicking and screaming to employ apprentices.
“The cut in apprenticeship grants will give them a further excuse not to employ apprentices.”
The union claims the industry currently needs 40,000 new entrants per annum in order to stand still.
Prior to the recession the number of apprentices being trained every year was only around 20,000 and numbers have subsequently fallen.
In 2009 Labour announced that all future government procurement projects must include apprentices or contractors would not receive work.
The then government also announced that it would create an additional 7,000 construction apprentice places.
Ritchie said: “The cuts in grants undermine the good work that the previous government had undertaken in promoting apprentice numbers and runs directly counter to the warm words from the coalition about encouraging apprenticeships.”