New reforms to the Apprenticeship System
The Labour government has introduced a series of significant reforms to the apprenticeship system, aiming to address skills shortages, improve accessibility, and modernise workforce training.
With the establishment of Skills England, a renewed focus on critical industries, and a £40 million investment in new apprenticeship initiatives, these changes seek to create clearer, more efficient pathways into employment.
- Skills England (part of the Department of Education)
This is a new body that is aiming to meet the skills needs of the future, assessing where the skills gaps are, and transforming the way things are done.
Skills England’s ‘Occupations in demand index’ released in September 2024, ranked care workers and home carers as to be in critical demand (only 7.8% of the UK workforce were found to be in critical demand occupations).
It’s first report, to determine which types of skills would be needed and for what jobs, had a focus on the health and social care sector.
- A £40 million investment will support the introduction of a new Foundation Apprenticeship program and the reduction of apprenticeship durations in key sectors.
Foundation Apprenticeships: These will equip individuals, whether young people or career changers, with the essential skills and knowledge needed for critical industries. These structured, paid opportunities provide a direct pathway into the workforce without requiring extensive prior experience.
Shorter Apprenticeships: Currently, apprenticeships must last at least 12 months. However, some apprentices are ready to qualify sooner. From August 2025, the minimum duration will be reduced to eight months. This change should benefit employers by providing skilled workers more quickly while also allowing apprentices to start their careers sooner, helping reduce the financial strain of longer training periods.
According to the Big Apprentice Survey, some apprentices believe this change will help address skills shortages and make apprenticeships more accessible by allowing faster entry into the workforce. However, others worry that a shorter timeframe may not allow enough time to develop skills fully, potentially leading to a less skilled workforce.
- A change from the apprenticeship levy to The Growth and Skills Levy
This introduces greater flexibility for employers in utilising their training funds. Businesses will be able to allocate up to 50% of their levy contributions to training programs beyond traditional apprenticeships.
The government are also intending to remove funding for Level 7 apprenticeships (equivalent to a master’s degree) from August 2025, redirecting the investment towards the lower-level apprenticeships instead. This shift, however, has raised concerns about potential barriers to career progression, reduced access to advanced qualifications for individuals from lower socio-economic backgrounds, and a possible decline in the availability of highly skilled professionals.
According to the Big Apprentice Survey, many apprentices worry that these changes may create complications and reduce the effectiveness of levy funds.
To ensure investment in high-value skills, the government will introduce a list of approved non-apprenticeship training courses that the levy can support.
- An increase in the apprentice minimum wage from £6.40 to £7.55 from April 2025
Apprentices surveyed believe it will make apprenticeships more attractive and financially viable, especially with the cost of living, but others worry that the higher wages will reduce opportunities with small businesses discouraged from hiring.
- Functional Skills Rule Change for Apprenticeships
Previously, apprentices on a Level 2 apprenticeship who had not passed GCSE English and Maths were required to take a Functional Skills qualification in these subjects.
This qualification was originally introduced to ensure a basic level of literacy and numeracy for apprentices. However, they have increasingly been seen as an obstacle rather than a support. They have been cited as “one of the biggest barriers” for training providers, employers, and apprentices, causing stress, missed opportunities, and limiting career progression.
Now, employers of adult apprentices (aged 19+) can decide whether English and Maths should be a required part of their training.
This change aims to remove a major barrier to apprenticeship entry and completion, particularly for those from disadvantaged backgrounds who may have struggled academically or those with learning disabilities.
The Department for Education reports that 45% of apprentices drop out annually without completing their programs. This adjustment could enable an additional 10,000 apprentices to graduate each year.
The Big Apprenticeship Survey:
Skills England: Driving growth and widening opportunities report:
https://assets.publishing.service.gov.uk/media/66ffd4fce84ae1fd8592ee37/Skills_England_Report.pdf
(The Times, BBC, The Commons Library, Institute for Fiscal Studies, Instep)