Apprenticeship reform update
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The intention of the government’s apprenticeship reform programme is ‘not revolution, but evolution’.
The apprenticeship offer is being aligned to the Industrial Strategy and future skills needs, with a selection of apprenticeship standards being removed as part of the reform.
Levy funding will be more focused on supporting young people into employment and building future workforce pipelines. Historically, a significant amount of apprenticeship funding was used for higher-level apprenticeships, including level 7 programmes and apprenticeships undertaken by people already in the workforce.
The apprenticeship reforms also include the streamlining of assessments, and the introduction of foundation apprenticeships and apprenticeship units.
The following sections explore these changes in more detail.
Why the reforms are taking place
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Apprenticeship starts among 16–24-year-olds have fallen by 40% over the past ten years, while participation in higher-level apprenticeships among older learners has increased.
At the same time, the apprenticeship offer has expanded to more than 700 standards, some of which have very low learner numbers or no starts at all. To ensure funding is directed towards priority skills needs, the government plans to withdraw funding from 16 apprenticeship standards from September 2026.
Apprentices who have already started programmes affected by funding withdrawals will continue to receive funding through to completion. The government is limiting the number of new starts on some standards before funding is withdrawn.
Foundation apprenticeships
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Foundation Apprenticeships are designed for learners aged 16–21, or for learners up to age 24 who have been in care or have an Education, Health and Care Plan.
Two additional Foundation Apprenticeships have recently been introduced in retail service, supply and administration, and catering and hospitality. These additions were made following employer feedback on skills and recruitment challenges within those sectors.
Apprenticeship units
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The government introduced the first wave of apprenticeship units from April 2026. These are short, modular courses for learners aged 19 and over, ranging from 30 to 140 guided learning hours.
Employers and providers will work together to agree delivery arrangements, learning outcomes, off-the-job hours and assessment methods. Providers are responsible for delivering the training and developing the assessment. Employers are encouraged to work closely with providers to ensure that assessments accurately assess the required knowledge and skills.
Levy funding changes
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A number of changes to the Growth and Skills Levy take effect from August 2026.
Once an employer’s Levy funds run out, government co-investment will cover 75% of the costs of taking on an apprentice (down from 90%), with employers contributing 25% (up from 10%). The government will also remove the existing 10% Levy top-up.
For small and medium-sized employers who don’t pay into the Levy, apprenticeship training for learners under the age of 25 will be fully funded.
In addition, from 1st August 2026, Levy funds will expire after 12 months if they are not used, compared with the current 24-month expiry period. Levy funding that entered an employer’s account before 31st July 2026 will still be available for 24 months before it is taken back by the government.
Employer incentives for apprenticeships
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Various financial incentives are available to employers recruiting young apprentices.
Employers and training providers can each receive £1,000 when supporting eligible apprentices aged 16–18, or 19–24-year-olds who have been in care or have an Education, Health and Care Plan. Employer-providers will receive both payments (£2,000 in total).
Employers do not pay National Insurance for apprentices under the age of 25 who earn less than £50,270 per year.
Additional support for non-Levy paying employers will be introduced from August 2026, with fully funded apprenticeships for under-25s and incentive payments of up to £2,000 from October 2026.
Foundation apprenticeship incentives
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Employers may be eligible for up to £2,000 in support for foundation apprentices aged 16–21, or eligible learners aged 22–24. The payments can be used towards employment-related costs such as wages, travel or uniforms.
Leadership and management apprenticeship withdrawals
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Within the 16 apprenticeship standards that will lose government funding, there are several leadership and management apprenticeships being withdrawn. This includes Level 3 Team Leader, Level 5 Operations Manager and Level 6 Chartered Manager.