The Department for Education has confirmed a significant overhaul of England’s apprenticeship system. From January 2026, public funding for most Level 7 apprenticeships will be withdrawn.
The government plans to redirect investment towards training routes for young people aged 16 to 21, focusing on sectors facing acute skill shortages. The reforms aim to address workforce gaps and youth unemployment while expanding technical skills training.
Alongside the withdrawal of funding for most Level 7 apprenticeships, a new programme of foundation-level apprenticeships targeted at under-22s will be introduced. This foundation programme is set to launch in August 2025 following a government decision to reduce the minimum duration of apprenticeships from 12 months to eight.
CIPD reaction to the announcement
The Chartered Institute of Personnel and Development (CIPD) has expressed concerns over the announced changes, cautioning that the broad withdrawal of funding risks undermining the credibility of the apprenticeship system.
Lizzie Crowley, senior skills adviser at the CIPD, said the announcement of 120,000 new training opportunities was a welcome recognition of the need to address youth unemployment and technical skills shortages. However, she added that the funding cut for Level 7 apprenticeships is unlikely to meaningfully boost youth participation, given that fewer than one in ten apprentices at this level are aged 16 to 21.
Crowley said, “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.”
Concerns over shortened apprenticeships and funding cuts
The CIPD also raised concerns about the introduction of the new foundation apprenticeships and the reduced programme duration. Crowley noted that England already offers some of the shortest apprenticeships internationally and warned that shortening programmes could damage the reputation and long-term credibility of apprenticeships.
“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,” she said. “Our research shows overwhelming employer support for this – 89 percent back such a guarantee, and 60 percent say they could offer an additional apprenticeship for someone in this age group under this model.”
Neil Carberry, Chief Executive of the Recruitment and Employment Confederation (REC), also commented on the government’s announcement. He said that targeting funds towards younger people is essential to provide stability and clarity in apprenticeship policy. However, Carberry criticised the reforms for failing to address the underlying issue of the apprenticeship levy’s poor design, which he argued has limited opportunities for young workers.
“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,” he said.
NHS employers warn of impact on clinical training
NHS Employers Chief Executive Danny Mortimer voiced concerns about the removal of funding for Level 7 apprenticeships for those over 21. He noted that the NHS provides one third of all public sector apprenticeships and uses the levy to invest in programmes that support workforce development. Mortimer warned that ending funding for these qualifications could create additional financial burdens at a critical time for the NHS.
“The NHS provides one third of all apprenticeships in the public sector, reinvesting the levy it pays to the Exchequer in programmes across all areas of our workforce,” said Mortimer. “There will be real concern in the NHS at the ending of funding from the levy for Level 7 apprenticeships for anyone aged over 21 – a route which has provided an increasingly important method of investment in experienced clinical staff to receive education which supports advanced practice in nursing and allied health professions.”
Mortimer also pointed out that the NHS had requested an exemption for Level 7 apprenticeships last November, describing them as strategically vital qualifications. He said this decision risks running counter to the sector’s long-term workforce aspirations and added that the NHS would look to the Chancellor to identify alternative funding mechanisms to support this essential education.
