The Apprenticeship Levy, as most technology leaders understood it, no longer exists. Since the 1st of April this year, it’s the Growth and Skills Levy, following the Autumn Budget 2025 and the Post-16 Education and Skills White Paper. Oversight has also moved, from the Institute for Apprenticeships and Technical Education to a new body called Skills England.
If your organisation’s training budget conversation last happened before April, it’s already running on assumptions that no longer hold.
What actually changed
Three mechanical changes matter most for anyone funding technical skills development.
Levy funds now expire twelve months after they land, down from twenty four. Employers who were used to banking a two-year runway for planning apprenticeship intakes now have half that window. Miss it, and the money simply disappears back to the Treasury.
The 10% government top-up that used to sit on every levy contribution has gone. It wasn’t a large sum on any single payment, but across a year of contributions from a mid-sized technology function, it added up to a meaningful buffer that no longer exists.
And if your organisation exhausts its levy pot, the co-investment required to keep funding further training has risen from 5% to 25% of the cost. CIPD’s own analysis is careful to note this mainly affects a smaller group of very high-volume levy users rather than every employer, but if your organisation runs a large apprenticeship programme, this is the change worth modelling first.
There’s a genuinely welcome change alongside the tighter ones. Level 7, master’s level, apprenticeships lost public funding for new starters aged 22 and over from January, with exceptions for care leavers and those with an education, health and care plan up to age 25, and protection for anyone who started before the change. If your organisation was using Level 7 apprenticeships as a de facto funded MBA route for older staff, that door has mostly closed.
The part worth getting excited about
Buried in the same reform is something genuinely useful for technology teams specifically. From this spring, the government introduced short “apprenticeship units”, bite-sized qualifications running from 30 to 140 hours rather than the one-to-four-year commitment of a full apprenticeship. The offer has already grown since launch. The original six construction and engineering units gained a seventh, on battery manufacturing, added in March. And what was first announced as a single AI leadership unit has since split into three separate ones: AI strategy and opportunity, AI adoption and governance, and AI delivery and organisational transformation. Ten units in total, all with an earliest start date in late April.
Employers can spend up to half their annual levy funds on these units. For a technology function that’s struggled to justify multi-year apprenticeship commitments for existing staff who just need a specific capability, this is a genuinely different tool. It’s aimed at exactly the kind of targeted upskilling that most training budgets have quietly been unable to fund through the traditional apprenticeship route.
There’s a second bright spot, and it’s now confirmed rather than merely announced. Since the 1st of August, small and medium employers get 100% government funding for apprentices under 25, whether or not they pay the levy at all, confirmed in a Department for Education update published on the 5th of August. Worth keeping the date straight: several commercial training guides have wrongly placed this at October, which is actually when a separate £2,000 government incentive for hiring young apprentices arrives. The two are easy to conflate and worth checking with your provider directly. If you’re a fractional leader working across smaller organisations, or running technology for one, the August change alone materially shifts the economics of bringing in junior talent this autumn.
Not everyone delivering these units is convinced they’re fit for purpose yet. FE Week has reported provider concern that the funding rates are too low to deliver proper quality, particularly for the AI units, and one major provider, Corndel, walked away entirely. Its chief executive was specific about why: the three AI units between them mandate ninety hours of live, synchronous delivery, nearly three working weeks, packed into what’s marketed as a set of 30-hour qualifications. Ofsted won’t inspect any of this provision until April 2027 at the earliest, so for now the only quality signals available are coming from providers themselves rather than an independent regulator. Worth asking your own provider exactly how they plan to deliver the hours before you commit budget to a unit.
Why I don’t think cost is the whole story
CIPD’s Lizzie Crowley made a point in January that I think technology leaders should sit with. Removing the SME co-investment requirement alone won’t transform participation, in her view, because cost was rarely the primary barrier stopping smaller employers from taking on apprentices in the first place. Capacity to supervise, uncertainty about qualification content, and simple awareness tend to matter more.
That’s worth remembering before treating the Growth and Skills Levy purely as a budgeting exercise. The mechanics changed and are worth modelling properly, but for most technology functions affordability was always only half the question. Management capacity and clarity of purpose, whether you actually have the bandwidth to make an apprenticeship or a short unit land, tends to matter just as much.
What I’d do this month
If you haven’t already, model your levy position against the new twelve-month expiry now, not at the next planning cycle. Losing funds to an expired window is entirely avoidable and entirely common.
If you’re running or considering Level 7 apprenticeships for existing staff over 22, check whether your current cohort falls inside the protected group or the newly unfunded one. This is the change most likely to catch finance teams by surprise.
And look seriously at the new short units, now ten of them spanning AI leadership and technical trades, as a way of getting targeted capability into a team without committing to a multi-year programme that was probably always a mismatch for what you actually needed. Given the delivery concerns providers themselves have raised, push for a straight answer on how those hours will actually be taught before you commit budget.
The Growth and Skills Levy amounts to a genuinely different set of incentives, live right now, and the organisations that treat it as background noise will be the ones explaining an expired levy pot to their board next year.
Sources: HM Treasury, Autumn Budget 2025; Department for Education, Post-16 Education and Skills White Paper; DfE apprenticeship service guidance, March 2026; CIPD commentary, January 2026; DfE Update further education, 5 August 2026; DWP/GOV.UK news release, 29 July 2026; FE Week reporting on apprenticeship units, April to June 2026. Validated 16 August 2026.