Unpacking major apprenticeship reform in the context of Skills England Report
As the UK navigates a rapidly evolving economic and technological landscape, the need for a responsive and future-proof skills system has never been more urgent.
04 June 2025
The June 2025 report from Skills England, Sector Evidence on the Growth and Skills Offer, not only marks the closure of IfATE on 1 June, but underscores the need to resolve persistent skills shortages, the growing demand for higher technical qualifications, and the importance of flexible, employer-responsive training pathways.
With plans to introduce the Growth and Skills Levy and a focus on foundation and shorter-duration apprenticeships geared towards younger learners, the government aims to align workforce development with its broader missions, ranging from economic growth to clean energy leadership. Employers across sectors have voiced a clear appetite for reforms that make apprenticeships more adaptable, accessible, and aligned with real-world demands.
As a result of this backdrop City & Guilds hosted a pivotal funding webinar, drawing hundreds of stakeholders from across the further education (FE) and skills sector. The session, led by City & Guilds experts Bryony Kingsland, Funding and Policy Insight lead, Eric Oliver, Funding & Policy Advisor, and Jamie Holland, Portfolio Planning Specialist, focused on sweeping changes to apprenticeship funding, maths and English requirements, and the introduction of foundation apprenticeships. With a 13% increase in the apprenticeship budget and significant policy shifts, the webinar offered timely insights and sparked lively discussion among providers and employers.
Apprenticeship budget boost and level 7 uncertainty
Reflecting Skills England’s call for a more responsive and better-funded apprenticeship system, the webinar opened with welcome news that the apprenticeship budget has risen by £345 million, bringing the total to £3.075 billion - the largest increase since the levy’s introduction in 2017. This uplift, attributed in part to lobbying efforts and Treasury reallocations, could offer breathing room for providers.
However, uncertainty remains, and the policy landscape is shifting rapidly. Since the webinar took place the Department for Education (DfE) has confirmed that public funding of the vast majority of level 7 apprenticeships will be scrapped from January 2026 for learners aged 22 and over. This marks a significant pivot in government strategy, with funding now being redirected to support younger learners, specifically those aged 16 to 21, as part of a broader effort to boost entry-level training and address declining participation at lower apprenticeship levels. This latest announcement underscores the urgency for providers and employers to adapt to a new funding reality focused on early career development.
City & Guilds has already prepared for the anticipated uplift in level 7 registrations that the policy change will drive over the next few months. Talk to our team if you have any questions about getting your level 7 registrations booked before it is too late.
Functional skills reform: Flexibility for 19+ learners
Echoing Skills England’s findings on the need to reduce barriers for learners and SMEs, the webinar explored the February 2025 policy shift to functional skills requirements. Apprentices aged 19 and over at the start of their programme are no longer required to achieve English and maths qualifications to complete their apprenticeship. While they must still attempt the assessments if enrolled, the decision to include functional skills now rests with the employer.
This change aims to remove barriers for capable apprentices who struggle with formal assessments, particularly in sectors like construction. It also offers greater flexibility for employers, potentially encouraging wider participation. However, concerns were raised about the risk of learners delaying apprenticeship starts to avoid functional skills, and the potential impact on literacy and numeracy standards.
A live poll revealed mixed reactions to the flexibilities: 26% of attendees said they would adapt delivery in response to the change, while 34% were unsure. The discussion underscored the importance of maintaining quality and ensuring apprentices receive the support they need, even if functional skills are no longer mandatory.
Off-the-job training: Standardised hours and greater flexibility
In line with Skills England’s recommendation for more adaptable delivery, the webinar highlighted the overhaul of off-the-job (OTJ) training requirements. From August 2025, OTJ hours will be set on a standard-by-standard basis, replacing the previous 20% rule. This change, based on ILR data and typical programme durations, aims to reduce administrative burden and standardise expectations across providers.
DfE Apprenticeship funding rules August 2025 to July 2026
Off-the-job training – minimum requirement for each apprenticeship standard
The new model allows providers to deliver the required hours over any timeframe, provided the minimum duration (eight months) and minimum OTJ hours for the individual standard are met. This flexibility could benefit both employers and learners, enabling accelerated delivery where appropriate. However, concerns were raised about the feasibility of delivering high OTJ hours in shorter timeframes, especially for part-time apprentices.
Foundation apprenticeships
The webinar also introduced the new foundation apprenticeships, aimed at 16-21-year-olds and certain priority groups. Skills England’s report identifies the need for broader, entry-level pathways, which is why foundation apprenticeship programmes blend technical and employability skills and are designed to support progression to further apprenticeships or employment.
While the concept was welcomed, readiness emerged as a key concern. With delivery stated by DfE to begin in August 2025, providers face tight timelines to prepare curriculum, and train staff. Jamie Holland, City & Guilds’ apprenticeship specialist, noted that City & Guilds is actively reviewing the assessment plans and exploring how to support delivery.
Polls revealed that only 16% of webinar attendees were likely or very likely to offer foundation apprenticeships from August 2025, though 59% expressed interest in delivering them in the future. The consensus was clear: while the model has potential, more time and clarity are needed to ensure successful implementation.
EPA assessment plan reforms and new terminology
Addressing the need for streamlined, employer-friendly assessment models, as highlighted in the Skills England report, the session concluded with discussions around the reforms to end-point assessment plans. DfE and Skills England are aiming to have all apprenticeship standards and assessment plans revised by August 2026 - aligning with a new, streamlined two-page assessment plan. These changes aim to reduce duplication, allow some assessments to be conducted on-programme by providers, and shift responsibility for behaviour sign-off to employers.
It was emphasised that EPA organisations (EPAOs) like City & Guilds will still play a critical role in quality assurance and validation. However, the reforms raise questions about provider approval, cost structures, and the need for early engagement between providers and assessment organisations.
New terminology will also be introduced: ‘apprenticeship assessment’ will replace ‘end-point assessment,’ and ‘assessment organisations’ will replace ‘EPAOs (end-point assessment organisations).’ A written agreement between providers and assessment organisations will be mandatory at the start of each apprenticeship.
A sector in transition
The webinar concluded with a final poll asking whether the changes would open new opportunities with previously disinterested employers. A majority (62%) responded positively, suggesting cautious optimism about the direction of travel.
While many questions remain, particularly around implementation timelines, funding clarity, and assessment logistics, City & Guilds reaffirmed its commitment to supporting providers through the transition. As Bryony Kingsland aptly summarised, ‘This is about making sure the apprenticeship journey is high quality, flexible, and accessible. There’s still a lot to work through, but we’re here to help you navigate it.’