Apprenticeship Budget Exceeds £3 Billion, Level 7 Apprenticeship Funding Restrictions Finally Announced

The Apprenticeship budget exceeds £3 billion for the first time, as new foundation apprenticeships announced . Starting January 2026, funding will be redirected from Level 7 (masters-level) Apprenticeships, with continued support reserved for Apprentices aged 16-21 and those already enrolled on Apprenticeship programmes.

120,000 new training opportunities in key sectors such as construction, engineering, health & social care, and digital  

Bridget Phillipson also has announced:

• Refocusing funding away from Level 7 (masters-level) apprenticeships from January 2026, while maintaining support for those aged 16-21 and existing apprentices. This will enable levy funding to be rebalanced towards training at lower levels, where it can have the greatest impact.  
• Launched 13 new Level 2 construction courses for adults in non-devolved areas under the Free Courses for Jobs scheme. 
• Implementing a 32% increase in the Immigration Skills Charge, which will deliver up to 45,000 additional training places to upskill the domestic workforce and reduce reliance on migration in priority sectors. As announced in the recent Immigration White Paper.  

• £14 million of adult skills funding for construction to be devolved to local mayors for next academic year, expected to support up to 5,000 additional adult learners. 
•  £136 million for Skills Bootcamps across a range of priority sectors in 2025-26, providing training to over 40,000 learners.  
• £100 million over four years to expand Construction Skills Bootcamps. 
• Ten Technical Excellence Colleges specialising in construction skills, opening in September 2025. 

Young people are set to benefit from 120,000 new training opportunities as part of a radical skills revolution, giving them the chance to develop skills where they are most needed across the workforce to rebuild Britain.

More skilled brickies, carpenters and healthcare support workers will soon be trained up as we continue our drive to get Britain working, with landmark reforms announced today that refocus the skills landscape towards young, domestic talent. 

Record-breaking £3 billion Apprenticeship Budget

The measures, backed by a record-breaking £3 billion apprenticeship budget, will open up opportunities for young people to succeed in careers the country vitally needs to prosper. More routes into skilled work means more people building affordable homes, more care for NHS patients and more digital experts to push our economy forward. This includes an additional 30,000 apprenticeship starts across this Parliament. 

This unprecedented investment is a critical step in delivering the government’s Plan for Change mission to create a decade of national renewal. We are backing our young people and investing in skills as an engine of economic growth – putting more money in people’s back pockets and breaking down barriers to opportunity. 

Education Secretary Bridget Phillipson said:   

“A skilled workforce is the key to steering the economy forward, and today we’re backing the next generation by giving young people more opportunities to learn a trade, earn a wage and achieve and thrive. 

“When we invest in skills for young people, we invest in a shared, stronger economic future – creating opportunities as part of our Plan for Change.

“But everyone has a role to play in a thriving economy, and we’re taking our responsibility seriously providing more routes into employment, it’s now the responsibility of young people to take them.”

In addition to the £3bn apprenticeship budget, DfE are backing a new generation of workers through:  

• £14 million of adult skills funding for construction to be devolved to local mayors for next academic year, expected to support up to 5,000 additional adult learners. 
•  £136 million for Skills Bootcamps across a range of priority sectors in 2025-26, providing training to over 40,000 learners.  
• £100 million over four years to expand Construction Skills Bootcamps. 
• Ten Technical Excellence Colleges specialising in construction skills, opening in September 2025. 

 As part of the government’s Plan for Change, the reforms are a vital step in delivering our youth guarantee and addressing skills shortages to drive growth while creating better opportunities for young people and adults across England.  

Today’s announcement comes following a dramatic fall in the number of apprenticeship starts over the last decade, and as recent ONS statistics show as many as one in eight 16-24 year olds are not in employment, education or training.  

The government is also confirming Board appointments to the new national body for skills, Skills England, which will work with employers and local leaders to shape training policy and delivery.    

Teacher recruitment in Further Education 

• This announcement comes after government published figures earlier this month which showed that around six thousand Further Education teachers received Targeted Retention Incentive (TRI) payments last year.  
• These payments are worth up to a £6,000 after tax on top of their salaries.  
• The majority of claims were in subjects critical to the government’s Plan for Change, such as construction (1,700), maths (1,400), and engineering (1,200). 
• The government also announced last week that we are investing an extra £160 million this year so that colleges and other 16-19 providers can recruit more expert teachers – and keep the ones they’ve got too. This will support high quality skills training for in-demand sectors.  
• This is part of the government’s push to boost FE teaching and recruit 6,500 new teachers in schools and colleges across England.  

Construction training  

• Building on the over £600 million of investment announced by the Chancellor in March, the government is also boosting job prospects for adults interested in jobs in construction by expanding construction training via Skills Bootcamps and Free Courses for Jobs.  
• The Department will devolve around £14 million of additional adult skills funding for the construction sector to local mayors for next academic year, giving them the freedom to make the right choices for their areas.  
• For providers in non-devolved areas, 21 new construction courses at Level 2 will be added to the Free Courses for Jobs offer available for adults so more people can upskill, improve their job prospects and earn a higher wage.   
• This recognises the urgent need of employers in the sector for skilled workers, who are crucial to driving growth and delivering the government’s housebuilding targets.  

Sector Reaction

Milton Walcott, HSEQ Manager Complete Fixing Solutions Ltd said, 

“I am excited to see the government’s focus on expanding apprenticeships and skills training for young people. The introduction of Foundation Apprenticeships is a great step forward in helping young people build the skills they need for the future.

“The emphasis on getting more 16-18-year-olds into work-based learning is particularly important, and we’re looking forward to supporting these efforts to help build a strong, skilled workforce that drives economic growth.” 

Rob Dodds, Controller, Unipres (UK) Ltd said, 

“What a fantastic opportunity for young people to start their careers with a Foundation apprenticeship, these reforms will remove some of the barriers that young people face when looking for an apprenticeship. 

“We are looking forward to the chance to run these apprenticeships after their launch in August.” 

Stephen Wilde, Managing Director, Southbourne Rubber Ltd said: 

“This is a bold and vital step forward in building real opportunities for young people and adults to build skills that matter in industries that shape our future. We’re proud to support this commitment to growing the UK’s talent pipeline.” 

Sarah Yong, Director of Policy and Public Affairs at Youth Futures Foundation said: 

“International evidence shows apprenticeships are a highly impactful way to support young people to prepare for and access jobs, yet participation among under-25s, especially the most marginalised, has declined in recent years.

“With stubbornly high youth unemployment and inactivity, rebalancing the apprenticeship system can encourage investment in youth apprenticeships and is a first step in enabling more young people to access good work.” 

Dani Payne Senior Researcher at the Social Market Foundation said: 

“New foundation apprenticeships have been confirmed to start this August in Construction & Built Environment, Engineering and Manufacturing, Health and Social Care, and Digital.

“This is estimated to drive up to 10,000 apprenticeship starts each year by 2026/27, with huge numbers of these being 16–18-year-olds.”

Responding to the Government’s announcement on skills funding, Association of Colleges Chief Executive David Hughes said:

“Additional investment into skills is always welcome, particularly when it is focused on key priority areas such as construction, digital and healthcare.

“The decision to cut levy funding for apprenticeships at Level 7, where people are pursuing higher level skills, will have been a tough one. However, with finances tight, it is right for resources to go towards helping people take the first steps in their career.”

In reaction to the Government’s decision to axe Level 7 apprenticeship funding, Petra Wilton, Director of Policy at the Chartered Management Institute, said:

“While the decision to significantly cut funding for Level 7 apprenticeships remains a disappointment, the priority now must be to support the learners already enrolled or preparing to start programmes. These include people in vital public services such as the NHS, education, and policing. 

“The Government’s decision to restrict Level 7 funding to those under 21 does not address the UK’s ongoing skills gap in management capability.  In practice, this wipes out virtually all funding for the Senior Leader Apprenticeship. Understandably, early-career learners are not at the stage in their working lives to undertake senior leadership apprenticeships.

“Independent research found that Level 7 Senior Leader apprenticeships are a key driver of multi-million-pound economic growth and social mobility across the UK. They are overrepresented by people who were on free school meals and who were the first in their families to go to university. These raise aspirations and offer tangible gains for hard-working families across the country. 

“We want to work constructively with ministers to ensure the apprenticeship system and the wider skills agenda can deliver the higher-level skills that UK employers tell us they desperately need. to grow the economy.

“With Level 7 funding now cut, other routes must continue to deliver those advanced skills our economy depends on. That means ensuring the Growth and Skills levy can flex to ensure that workers at every age and stage of their working lives get a chance to improve their skills. The much-needed focus on young people needs to go hand in hand with a commitment to the millions of people already in work across the UK.”

Commenting on the government announcements on skills reforms, the Recruitment and Employment Confederation (REC) Chief Executive Neil Carberry said:

“A greater targeting of funds on younger people is essential to protect their pathways into work, and offers greater stability and clarity in apprenticeship policy. 

“Yet the changes announced today do not progress us on the real challenge that has driven down apprenticeship opportunities for young workers which is the poor design of the apprenticeship levy. Fixing the levy with real progress on a new Growth and Skills levy is a big task but offers a big reward for people and employers. Firms are increasingly frustrated by the lack of progress on this.  A greater embrace of shorter, modular courses and collaboration with employers is the way to maximise the talent in this country, and is essential for industries from healthcare to construction.”

Angela Joyce, Chief Executive of Capital City College, the largest further education provider in London, said:

“Apprenticeships are a fantastic route for many people at different stages of their careers; the opportunity to earn and learn with a supportive employer. The challenge is the bureaucratic burden of apprenticeships, especially for small and medium sized employers, alongside a funding model that means for some employers they are simply not commercially viable.

“We need more employers to work with colleges to create more apprenticeship opportunities at all levels in all industries. The planned reforms to the Skills and Growth Levy should present the opportunity to make apprenticeships more appealing to employers; less bureaucratic for colleges; and an option for any individual ready for a structured training programme whilst employed.”

Ben Rowland, AELP CEO, said:

“Breaking through the £3bn mark is a significant milestone for the apprenticeship budget. We applaud this step and look forward to working with the Department for Education and HM Treasury to ensure even more of the Levy is used to deliver the skills that employers need and in ways that boost productivity and drive growth.

“The Level 7 announcement, while not a surprise, is still a disappointment, especially for those who are young but happen to be 22 and over. However, delaying implementation to the start of 2026 is a sensible step and gives some time for adjustment.

“Foundation Apprenticeships could be an impactful route into employment for young people. However, if government is serious about getting more young people – and those at entry level – into high quality training programmes, then everyday sector areas like hospitality and retail need to be the next area of focus. There will be lots to learn from the first round to make this a continually improving new initiative and we’d encourage government to push forward with this.”

Vivienne Stern, Chief Executive of Universities UK said:

“Confirmation today that the vast majority of Level 7 apprenticeships will no longer receive public funding will be disappointing news for many universities and, more importantly, employers. Universities have grown Level 7 apprenticeship provision, encouraged by government and employer and student demand. These apprenticeships have become extremely valuable to many sectors and essential public services. In 2023/24 there were 2,040 Level 7 apprenticeship starts in Health, Public Services and Care apprenticeships – a figure which has significantly grown in the last 5 years. The reality is that the NHS will need to continue to fund this training, but it will now have to be taken from existing budgets. These cuts are also yet another financial blow to universities, on top of National Insurance hikes and the proposed levy on international students.

“The exemption for those aged 21 and under will leave so few students on these courses eligible for funding that many will become unviable at a time when Skills England’s forecasts show we need more high-level skills in the economy. We recognise the tough fiscal choices government faces but supporting early careers need not come at the expense of upskilling and retraining the existing workforce. 

“The announcement that this decision will take effect from January 2026 will provide universities with the clarity they need to plan for the year ahead. We look forward to working with government on the continued success of Level 6 degree apprenticeships and the whole package of announcements to ensure access to the skills our economy and public services need.”

Responding to Government’s reforms to the apprenticeship system, Mark Hilton, Policy Delivery Director at BusinessLDN, said:

“The Government is right to boost training opportunities and investment in skills for young people, especially given apprenticeships for this group have fallen sharply in recent years.

“It’s regrettable, however, that people aged over 21 will no longer qualify for level 7 apprenticeships from next year. These apprenticeships provide an important route to upskill staff so that they are equipped for the jobs of today and tomorrow.

“The Government should consider other ways to support level 7 apprenticeships, including by ensuring its new Growth & Skills levy increases the flow of funds spent on skills and crowds in more private investment in training.”

Stephen Evans, Chief Executive of Learning and Work Institute, said:

“The increase in the apprenticeship budget is welcome. The Government is right to prioritise young people, given the huge falls seen in apprenticeships for them over recent years. This needs to be part of a wider plan to help the almost one million young people not in education, employment or training. But it can only be a first step, given public investment in skills in England is £1 billion lower than in 2010 and employer’s are investing 26% less in training than 20 years ago.”

Alison Morris, Director of Policy, Skills Federation said:

“We welcome today’s announcement to invest in the expansion of apprenticeship and skills opportunities for young people and in priority sectors. The renewed recognition of the value of a sector-based approach to skills, is an important step towards meeting employer’s needs and achieving our growth ambitions. Skills Federation and its members look forward to working closely with government on this.”

Commenting on the reforms to level 7 apprenticeships announced by the Education Secretary, Bridget Phillipson, Robbie Cruikshanks, Senior Researcher for Higher Education at the Education Policy Institute (EPI) said:

“The government’s announcement this morning to reform apprenticeship funding shows a promising focus on younger students, and provides a welcome boost to apprenticeship funding.

“However, it is crucial that the removal of levy funding for Level 7 apprenticeships does not risk deepening longstanding skills gaps across critical sectors such as advanced manufacturing, digital technology, and healthcare, where apprenticeships are vital in up-skilling workers of all ages. Alongside the refocusing of the levy on lower-level apprenticeships, the government must go further to support employers and students in providing and accessing these courses to reverse the falls in apprenticeship starts and decline in achievement rates in recent years.

“Additionally, the government must develop a clearer strategy to ensure young people from disadvantaged backgrounds are better able to access apprenticeships. At present, this group of young people are disproportionately under-represented in apprenticeship schemes and so the government should consider utilising any savings from these reforms to the levy to broaden access and participation in apprenticeships for the most disadvantaged students.”

Chartered ABS statement on the Government’s announcement defunding Level 7 apprenticeships 

The Chartered ABS has responded to the Government’s decision to withdraw funding for Level 7 apprenticeships from January 2026, except for apprentices aged 18 to 21.  

Professor Stewart Robinson, Chair of the Chartered Association of Business Schools said:  

“Level 7 business and management apprenticeships play a vital role in closing our nation’s productivity gap, strengthening public services and the NHS, and promoting social mobility. The decision to defund level 7 apprenticeships undermines the Government’s growth mission, the Industrial Strategy, and productivity levels in the UK. 

“A dynamic growing economy needs a skills system that supports development from lower level skills into higher level skills. The changes announced by the Government will severely limit aspiration and opportunities for learners to progress through the apprenticeships levels to attain the highest-level skills employers are looking for. 

“The impact of this policy will be devastating for UK business schools, the broader higher education sector, and learners and employers who benefit from these opportunities.” 

Along with other bodies in the High Level Skills Group we have urged the Government to extend the age-based exemption and introduce exemptions for the public sector and SMEs. We also called on the Government to grant levy-paying employers some flexibility to spend any flexible portion of their Levy entitlement on Level 7 apprenticeships. 

Lizzie Crowley, senior skills adviser at the CIPD, the professional body for HR and people development, said:

“The government’s announcement of 120,000 new training opportunities for young people is welcome recognition of the urgent need to address persistently high levels of youth unemployment, economic inactivity, and technical skills shortages. However, a more ambitious approach is needed to genuinely expand opportunities and rebalance the system in favour of young people, including an apprenticeship guarantee for all 16-24 years olds. 

“The decision to restrict government funding for all Level 7 apprenticeships to those aged 16 to 21 is unlikely to meaningfully boost youth participation given that fewer than one in 10 apprentices who train at this level fall within this age bracket.  While the aim of rebalancing the system towards young people is important, this blunt approach risks undermining the breadth and ambition of the apprenticeship offer. We have previously argued for a more nuanced approach to managing the cost of delivering higher-level apprenticeships, for instance via reduced subsidies for older apprentices. 

“New foundation apprenticeships are also set to be introduced for those aged 16 to 21. These are expected to launch this August following a government decision to lower the minimum duration of apprenticeships from 12 months to eight. Expanding opportunities is vital but shortening programmes risks damaging the reputation and long-term credibility of apprenticeships. England already offers some of the shortest apprenticeships internationally, in contrast to the two-year norm in many countries. 

“To genuinely increase apprenticeship opportunities for young people, we are calling for an apprenticeship guarantee for all 16- to 24-year-olds, supported by enhanced financial incentives for SMEs. Our research shows overwhelming employer support for this – 89% back such a guarantee, and 60% say they could offer an additional apprenticeship for someone in this age group under this model.”

Tania Cooper MBE, Chair of the North East STEM Foundation (NESF), has welcomed the major change to apprenticeships and training opportunities announced by the Government today (Tuesday 27^th May)

She said: “The North East STEM Foundation welcomes the Government’s renewed commitment to addressing the UK’s skills gap through a package of training and apprenticeship reforms. The creation of 120,000 new training opportunities, including 30,000 additional apprenticeships over the next four years, backed by a record £3 billion investment, represents a much-needed boost for the future workforce.

“It’s a positive step toward opening high-quality, accessible career pathways for young people in vital sectors, including engineering, construction, healthcare, and digital technology – all of which underpin the economic resilience of both the North East and the nation.

“We are particularly encouraged by the focus on building a strong domestic talent pipeline, reducing reliance on overseas recruitment, and investing in young people aged 16 to 21; Ensuring more have an opportunity to train, earn, and progress in industries that need them most.

“At North East STEM Foundation, our mission is to break down barriers to STEM education, ensuring every young person, regardless of background, can thrive in a modern, employer-supported learning environment. These government reforms align with that mission and offer a chance to make systemic, long-term change.

“As funding is redirected toward early-stage training where it can have the greatest impact, it is vital that implementation is inclusive and effective. We urge policymakers to work collaboratively with employers, educators, and organisations like ours to ensure this investment truly delivers for young people, and for the future of UK industry.

“We remain committed to supporting and inspiring the next generation through hands-on STEM engagement, targeted financial support, and the creation of future-ready education spaces. With the right partnerships and continued momentum, these reforms have the potential to unlock real opportunity, and lasting impact, across the North East and beyond.”

CILEX (The Chartered Institute of Legal Executives) President, Yanthé Richardson says:

“Access to justice and good law are always going to be improved when there is genuine diversity in the profession. Locking out routes to qualification for those from socio-economically disadvantaged backgrounds and those with protected characteristics can surely never be a good decision. Ensuring apprenticeship routes remain inclusive and equitable is vital.

“We urge the Department for Education and government ministers to protect Level 7 apprenticeship funding, or at the very least, ring-fence funding for those most at risk of exclusion. Removing this support now would undo years of progress in promoting diversity, equity, and inclusion in the legal profession.”