The UK’s apprenticeship landscape is set for the biggest shift since the introduction of the Levy and Standard with new funding rules for 2025/26 and recent government announcements. These changes, aimed at boosting skills in key sectors and supporting younger learners, bring both promise and a sense of missed opportunities. For employers and training providers, understanding these new dynamics is key to navigating the future of apprenticeships.
A Glimpse at the Key Changes:
The government is positioning these reforms as a vital step of its strategy to address the UK’s skills gaps and strengthen the domestic workforce. Notable headline changes:
- Record Investment: Apprenticeship funding is set to exceed £3 billion, signalling a significant investment in vocational training.
- Foundation Apprenticeships: Will create a new pathway for 16 to 21-year-olds, offering routes into sectors like Construction, Digital, Engineering, and Health & Social Care.
- Shorter Duration: The minimum apprenticeship length is being reduced from 12 to 8 months, offering more adaptable training options.
- Training Rule Reform: The blanket 20% off-the-job training requirement will be replaced by standard-specific minimums. I am sure Compliance teams across the country are ecstatic.
- Funding Shift: From January 2026, government support for Level 7 apprenticeships will be cut for those aged 22 and over as part of a strategy to rebalance funding towards lower-level and younger apprentices.
- Immigration Skills Charge: Increased charges will generate over £400 million to fund a significant number of new training places via the Department for Education.
- The End-Point Assessment (EPA): Being rebranded as “Apprenticeship Assessment,” with changes aimed at streamlining the process and allowing for more on-programme assessment.
Missed Opportunities and Lingering Questions:
While these changes welcome flexibility and a focus on younger learners, many in the sector feel that several opportunities have been missed:
Bureaucratic Overload
Do we really need 125 pages of rules to train apprentices – especially when assessments are external? This was a huge opportunity to drastically reduce the funding rules to sensible proportions. Very few sectors have such stringent rules to operate to and provides bureaucratic bloat in policy and providers resulting in less funding reaching learners.
The loss of Level 7
I have previously stated that I am against the cutting access to Level 7 apprenticeships, primarily because:
- Many sectors, including law and healthcare (particularly the NHS), rely on Level 7 apprenticeships to develop senior professionals and specialists.
- The strongest argument for Level 7 apprenticeships in my opinion: Social Mobility, Level 7 Apprenticeships offer a vital, debt-free route to advanced qualifications and career progression, especially for those who didn’t follow a traditional university path and those whose employers would not have previously paid for the qualifications e.g. Local Authorities, SME’s, NHS etc
- The changes limit opportunities for experienced workers to upskill and reskill at a higher level, hindering productivity and adaptability.
Foundation Apprenticeships
Seem to have a limited scope. Now, however, benefit of the doubt should be given that this is a new provision and will be monitored. The exclusion of key sectors like hospitality and retail from the initial list has been met with disappointment. These sectors are significant employers of young people, and their omission seems counterintuitive to the goal of providing broad entry-level opportunities. Furthermore, some have questioned whether the 8-month duration will sufficiently differentiate these from existing Level 2 apprenticeships.
The Growth and Skills Levy
The much-anticipated Growth and Skills Levy did not appear, which was largely unsurprising as there is very little headroom in the skills budget, far less than was previously quoted. However, many had hoped for a more fundamental reform of the Apprenticeship Levy to be more flexible, allowing employers greater freedom to invest in a wider range of training. The current changes, while making some adjustments, fall short of this broader vision.
Skills Gap Still Unaddressed
While there’s a general focus on skills, I would argue that the changes don’t go far enough in specifically addressing the UK’s persistent and critical skills gaps including in Digital, STEM, Advanced Manufacturing and Leadership (Loss of level 7 is counterintuitive).
The Road Ahead:
The 2025/26 apprenticeship funding changes represent a mixed bag. The increased investment and focus on younger learners are undoubtedly positive steps. However, the concerns around higher-level skills, the scope of Foundation Apprenticeships, and the overall rigidity of the system cannot be ignored.
For businesses and training providers, the key will be to adapt to these new rules while continuing to advocate for a more holistic and responsive apprenticeship system. One that not only provides entry-level opportunities but also supports lifelong learning and the development of the high-level skills the UK economy so desperately needs. As these changes roll out, open dialogue and a willingness to refine the approach will be essential to ensure that apprenticeships truly deliver on their potential for individuals, businesses, and the nation as a whole.
By Craig Mincher, Managing Director at WBTC.