The Future of Vocational Education Post-Rachel Reeves’ UK Budget

Explore what recent skills reforms mean for providers and how City & Guilds is helping the sector navigate change with confidence.

20 January 2026

Navigating the future of vocational education together

The UK’s vocational and skills landscape is entering another period of significant change. Recent Budget 2025 announcements and the Post-16 Education and Skills White Paper are reshaping funding, qualifications and pathways into work, creating both opportunity and uncertainty for training providers, colleges and employers alike.  

At moments like this, clarity and confidence matter. This article looks into what the changing landscape means in practice, and shares the vision of City & Guilds for the year ahead, with a focus on partnership, quality and real-world outcomes for learners.


Budget summary for educators and training providers

The Autumn Budget showed that the Government is placing greater emphasis on skills aligned to economic growth, flexible pathways into work, and stronger employer involvement. Rachel Reeves’ Budget confirmed full funding for under‑25 apprenticeships in SMEs and set the direction for a transition to a Growth and Skills Levy from 2026, alongside an £820m Youth Guarantee to help young people into paid work placements. The Reeves Budget also shortens the expiry window for levy funds to 12 months and removes the 10% top‑up for levy payers, with a 75/25 co‑investment when funds run out. For many providers, the challenge is not understanding what is changing, but how to respond in a way that protects learners, supports staff and delivers long‑term value. 


Why reform feels challenging on the ground

Change carries an operational burden: approvals, administration and systems updates; pressure on teams to transition quickly while maintaining quality; and questions about which qualifications deliver real employment outcomes. The need for simpler processes and clearer guidance is acute, especially as modular and shorter courses are introduced. Providers need reassurance that they are not navigating this alone. That’s where we come in.


150 years of guiding you through change

Reforms, such as those resulting from the UK Budget of 2025, have always been a key part of vocational education. Over nearly 150 years, City & Guilds has supported the sector through multiple waves of change, from industrial transformation to modern apprenticeship reform. That experience matters: understanding not just policy intent, but what works in real delivery environments; recognising pressures on teams; and designing solutions that are practical, credible and sustainable. 


A clear vision post-Rachel Reeves’ UK Budget

Looking ahead, the focus of City & Guilds focus is simple: help the sector navigate the budget reforms with confidence, and to emerge stronger. Our vision is built around inclusive pathways that support learners at every stage; qualifications and credentials that lead to real jobs and progression; systems and support that make delivery simpler, not harder; and partnership for co‑creating solutions with providers, employers and government. 


Our six pillars shaping the future of vocational education

From credibility to value for money, we have six pillars that guide how we design, deliver and support our vocational education offering.  

  • Credibility: We’re recognised and trusted by employers  
  • Highly effective curriculum design: Always industry-relevant and up-to-date 
  • Outstanding learner experience: Engaging, real-world relevant, inclusive content 
  • First-rate provider support: Seamless onboarding and responsive training 
  • Manageability: Fast, integrated solutions to reduce your administrative burden 
  • Value for money: Transparent pricing, clear added value and demonstrable employment outcomes 

 

Built in collaboration with educators and providers

Reforms work best when they’re shaped collaboratively. City & Guilds is committed to listening to provider feedback, co‑designing qualifications and support models, engaging employers to ensure real‑world relevance, and adjusting processes based on what works in practice.


What training providers and employers need to do in 2026

The year ahead is about navigating transition while protecting learner outcomes and organisational resilience. Providers should map their provision against national priorities, prepare for levy changes and modular delivery, and engage as early as possible with partners. Employers should access skills solutions that are flexible, credible and aligned to workforce needs. The role of City & Guilds is to make that journey clearer by providing reassurance during uncertainty, practical support through change, and qualifications and pathways that deliver long‑term value. 

You can explore our previous articles, including our UK budget summary and a look at what it means for you. 

If you have further questions about what the Budget means for your college or training centre, talk to us: customersupport@cityandguilds.com