The Changing Landscape of Apprenticeships for Employers

The Changing Landscape of Apprenticeships for Employers

We are starting to see changes in the world of apprenticeships following the appointment of the Labour government, over one year ago. As with every year, from 1st August a revised set of apprenticeship funding rules has come into force. The changes that are contained within these rules, aligned with the announcement since taking office, give an indication in the direction of travel for Apprenticeships over the current parliamentary term, which ends at the latest in 2029.

What do we know so far? Below are some of the key developments that will impact employers.

Skills England

On 31st May 2025, the Institute for Apprenticeships and Technical Education (IFATE) became Skills England. The aim of Skills England is to bring together central and local government, employers, providers and education establishments to guide the post-16 skills agenda over the next decade. The Skills England board seems to consist of people representing the appropriate stakeholders combined authorities, private training providers, colleges, trade unions and above all private and public sector employers. We now wait to see if this group are able to steer post 16 education, including apprenticeships, in the direction that employers and the economy need. Only then does this then create opportunities that support young people entering the workforce and the development of those already within it.

The Growth and Skills Levy has arrived

In April 2025, the Apprenticeship Levy officially changed to the Growth and Skills Levy. It is expected that this will eventually enable the flexible use of the funding, potentially support other non-apprenticeship programmes of learning such as short or modular courses. There is no clear direction on this, and the sector awaits further announcements.

Level 7 Apprenticeships will have a limited role to play

From January 2026, employers will no longer be able to use their Growth and Skills Levy to fund Level 7 apprenticeships unless the learner is aged 16 to 21 or up to 24 and on an Education, Health and Care Plan. The government's decision on this seems to have been stimulated by a desire to direct funding towards apprenticeships accessible by individuals entering the employment market and the continued development of employees at level 6 or below. A significant amount of the apprenticeship budget has been used on Level 7 apprenticeships, and this change may result in employers accessing other elements of the apprenticeship market. It is possible employers will support more employees in entry-level and mid-level management roles or in developing strategies to grow their own talent through the recruitment of young apprentices. Intec believe that as the deadline for this change approaches employers may want to consult on how to get the best from their Growth and Skills Levy from January 2026 onwards.

Continued commitment to upskilling staff, regardless of age

There is continued backing by government in the use of the Skills and Growth Levy for apprenticeships from Level 2 to Level 6 and critically for all ages. The growth of an individual within an employment is all important and maintaining this approach in the use of levy funds enables employers to invest in the skills they consider crucial to the future success of their business.

Minimum duration and off-the-job training see some flexibility

From 1st August 2025, all new starts will have a minimum duration of eight months or more. The Department for Education has also revised the off-the-job training hours, making them specific to each standard. Even where an apprenticeship is delivered in eight months, those off-the-job hours must still be planned and delivered. This is an important change increasing the flexibility in the levy and making its use by employers, particularly with those employees already in their employment, more attractive and adaptable.

Employees in part time employment

Previously, an employee who was on a part time contract (less than 30 hours) was required to have their programme duration extended. From the 1^st August 2025 there is no longer the requirement to automatically extended the planned apprenticeship duration. However, time in employment must be considered by the provider to ensure a realistic timeframe is set for the Apprentice. The off-the-job hours must still be achieved but this change means that part time and zero contract hours apprentices no longer have an extended minimum duration, potentially making the apprenticeship programme an attractive learning opportunity.

Functional skills remain flexible

Functional skills will see no change, maintaining the flexibilities that were introduced from 1^st April 2025. Learners aged 19 and over have greater flexibility and may opt out of functional skills delivery requirements whereas learners aged 16-18 are expected to attempt functional skills up to Level 2.

Foundation apprenticeships are launched

From August 2025, employers will be able to use their Growth and Skills Levy to deliver a limited range of foundation apprenticeships. foundation apprenticeships are aimed at supporting the transition of young people into employment in a limited number of sectors including construction, care and digital. There is currently no guidance on if these sectors will expand to cover other areas of the economy.

End point assessment will change

There are changes pending in this area of apprenticeships, and we await guidance from the Department for Education. The current changes announced are around the use of terminology. End-Point Assessment is being replaced by the phrase 'Apprenticeship Assessment'. End-Point Assessment Organisations will be known as 'Assessment Organisations', and Gateway will be known as 'Gateway to Completion'. These changes in terminology have been undertaken to reflect that the assessment of new knowledge, skills and behaviour, can take place at any stage of the apprenticeship. Further developments are expected in 2026.

The changes detailed above reflect the direction of travel in Apprenticeships under the government and you may wish to explore these changes further with our knowledgeable team.