Overview of changes to Apprenticeship Funding Rules for 2025/26

Growth and Skills Levy

On 1st April 2025 the Apprenticeship Levy became the Growth and Skills Levy. Skills England "committed to offering more flexibility and choice over how apprenticeship levy funds can be spent, while simplifying the system for employers and providers"

Department for Education (DfE) have announced that:

• From August 2025 they are launching new Foundation Apprenticeships and Shorter Duration Apprenticeships - with the minimum duration of apprenticeship reducing to 8 months (subject to legislation being in place). 
• From January 2026, eligibility for Level 7 funding will be restricted.
• From April 2026, shorter courses in digital, AI and engineering will become available.

Level 7 Apprenticeships

The government has decided that funding for level 7 apprenticeships will only be available to apprentices aged 16-21 and care leavers or people with EHCPs aged 19-24. These changes to funding will commence from January 2026. Those already on programme and over 21 will still be funded through to withdrawal or completion. 

Foundation Apprenticeships

Foundation Apprenticeships (FAs) are an employed position offering a new entry route for young people. There has been an initial announcement of 7 programmes all at Level 2 across 4 sectors. The knowledge, skills and behaviours are broader than a single job role.

FAs are open to young people aged 16-21 or those aged 22-24 who are care leavers, have an EHCP, or are individuals in or recently released from prison. An FA can be completed at the same or lower level than an existing qualification, if it develops new knowledge, skills and behaviours. 

For those aged 16-18, undertaking Maths and English remains a requirement, but assessment/achievement is not mandatory to achieve the FA. If the apprentice is 19-24 maths and English remain optional. 

Employers and providers can access incentive payments of up to £2,000 in total for eligible learners. This is on top of the existing £1,000 age incentive already offered by the government for people aged16 -18.

Shorter Apprenticeships

There are different ways shorter duration apprenticeships can be achieved:

• Shorter by design - revised shorter apprenticeship standards.
• Accelerated delivery model - delivering some content more quickly.
• Recognition of Prior Learning (RPL) - prior learning can be assessed and recorded to reduce length of apprenticeship.

To be noted; unless a Foundation Apprenticeship or apprenticeship which is shorter by design, the reduction in length could impact the 16-18 year old £1,000 incentive as the 2nd instalment is delivered after an apprentice completes 365 days.

Off The Job Training (OTJT) 

From August 2025, there will be new standard-by-standard requirements for OTJT hours. Each apprenticeship standard will have its own published minimum OTJT requirement, removing the need to calculate hours based on working time. Training providers can deliver more than the minimum, as required.

The minimum length of apprenticeships will reduce from 12 months to 8 months or 187 OTJT hours. This allows programmes to be delivered flexibly across any timeline without affecting OTJT hour requirements. 

The DfE have also removed the distinction between full-time and part-time apprenticeships when it comes to OTJT delivery. This 'de-coupling' of duration and OTJT means that the duration of part-time apprenticeships does not automatically need to be extended with providers ensuring planned training is realistic based on working hours. 

Assessment Reform

In February 2025, the Government announced improvements to apprenticeship assessment and published a new set of assessment principles. The assessment process will be streamlined by enabling more design and delivery flexibility so that: 

• Assessment is more proportionate to the competency being tested and removes any duplication.
• Where appropriate, assessment plans can be designed to allow assessment to take place on programme. 
• Where appropriate, training providers will be able to deliver elements of the assessment. End-point Assessment Organisations (EPAOs) will continue to shape the assessment and ensure the validity of outcomes.

These changes will apply to all apprenticeships, at all levels. Existing assessment plans will be rewritten on a standard-by-standard basis to reflect these changes, with the first plans already being revised. New style assessment plans are launching from August 2025 - once rules have been consulted on and approved.

The new funding rules adopt a change in terminology to reflect that apprenticeship assessment can take place at any stage of the apprenticeship, not just at the end: 

• "Apprenticeship assessment" will replace end-point assessment 
• "Assessment organisation" will replace end-point assessment organisation
• "Gateway to completion" will replace gateway

New Funding Rules (v2) - all the details

For a full break down of all the changes to funding rules for the academic year 2025-2026 follow the link below:

GOV.UK | Apprenticeship funding rules 2025/26