The UK Government has unveiled a major overhaul of the apprenticeship system in England, aiming to increase opportunities for young people and address critical skills shortages across various sectors.
Prime Minister Sir Keir Starmer and Education Secretary Bridget Phillipson have announced a new Growth and Skills Levy, which will replace the existing apprenticeship levy. The reforms also introduce foundation apprenticeships to offer new routes into essential industries.
The new levy is designed to provide more flexibility for both learners and employers. Unlike the current system, which mandates that apprenticeships last at least 12 months, the new structure will allow shorter apprenticeships. This change is expected to offer greater adaptability in training, ensuring that both employers’ needs and the evolving skills landscape are met.
These initiatives are set to target skills gaps identified by Skills England, the government body established in July to assess and guide the nation’s skills development. The Department for Education (DfE) will provide further details on how the reformed system will work in practice.
Focus on Foundation Apprenticeships and Youth Employment
The introduction of foundation apprenticeships is a key component of the reforms. These programmes will offer young people an entry point into critical sectors, allowing them to earn a wage while gaining essential skills for their chosen industries.
As part of the plan, employers are being encouraged to focus their apprenticeship funding on younger workers. This shift is intended to balance the current emphasis on higher-level apprenticeships, which are often pursued by older or already well-qualified employees. Under the new system, employers will be asked to co-invest in level 7 apprenticeships – equivalent to a master’s degree – to make more resources available for training young people.
The Prime Minister’s announcement reflects the government’s commitment to fostering a skills-driven workforce. The reforms will also ensure that training under the Growth and Skills Levy is adaptable, with the eligible programmes evolving over time in line with Skills England’s recommendations.
Skills England Report Highlights Nationwide Skills Shortages
Coinciding with the apprenticeship reform announcement, the first report from Skills England has revealed pressing skills gaps across the UK. The report finds that employer investment in training has significantly decreased over the past decade, with training expenditure per employee down 19% in real terms since 2011. This decline highlights the urgent need for government-led reforms in the skills and apprenticeships system.
Skills England’s assessment shows that nearly 1 in 10 roles, or more than 2.5 million jobs, are in critical demand. Over 90% of these positions require training or education. The health and social care sector is experiencing the greatest demand, followed by education, manufacturing, and science and technology. This report will play a central role in shaping future training programmes funded under the Growth and Skills Levy.
Skills England’s role is crucial in addressing the growing demand for skilled workers and ensuring that the apprenticeship system meets the evolving needs of the UK economy. It will collaborate with stakeholders to advise the Department for Education on future training priorities.
Government and Industry Response
The apprenticeship reforms have been met with cautious optimism from industry leaders. Lizzie Crowley, Senior Skills Policy Adviser at the CIPD, welcomed the government’s focus on youth employment through foundation apprenticeships and the increased flexibility provided by the new levy.
“We welcome yesterday’s announcement to increase apprenticeship opportunities for young people and introduce new foundation apprenticeship pathways, while also providing employers with much-needed flexibility in the types of training they can access under the new Growth and Skills Levy,” Crowley said.
However, Crowley emphasised that more support is needed for small and medium-sized enterprises (SMEs), which do not currently contribute to the levy. She highlighted that the decline in SME participation in the apprenticeship system has contributed to the overall drop in apprenticeship numbers, particularly affecting opportunities for young people.
“More action is required to support smaller firms who don’t contribute to the current levy to unlock more apprenticeships for young people,” Crowley added. “The collapse in SME participation in the system has driven the overall decline in apprenticeship numbers, and a lack of opportunities for young people in particular.”
A Step Towards Tackling Critical Skills Gaps
The government’s reforms are expected to play a key role in addressing the UK’s skills shortages and improving opportunities for young workers. By placing a greater focus on foundation apprenticeships and allowing more flexible training options, the new Growth and Skills Levy seeks to create a more responsive and effective skills system.
As Skills England continues to assess the evolving needs of the workforce, the government is likely to refine its approach further to ensure that the apprenticeship system remains fit for purpose in the face of future challenges.
Employers, particularly SMEs, are being urged to take advantage of the new system to boost training opportunities and help close the nation’s skills gap. The success of these reforms will depend on continued investment in training and development, alongside robust collaboration between industry, government, and educational institutions.
