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The Government has unveiled a £725 million package of reforms designed to expand apprenticeship and training opportunities for young people. While the primary focus of the announcement is on addressing youth unemployment, there are potential advantages for small and medium-sized businesses as well.
Below is a summary of the key changes and how they could affect your workforce planning in the years ahead.
Fully Funded Apprenticeships for Under-25s at SMEs
One of the most notable changes is the removal of the 5% co-investment requirement for apprentices under the age of 25 at small and medium-sized employers.
As a result, training costs for eligible apprentices will be fully funded by the Government. If you have previously ruled out apprenticeships because of training and assessment expenses, this change may make them a more attractive option. Apprenticeships could provide a cost-effective way to fill entry-level roles while developing skills within your business.
Increased Local Support to Source Apprentices
The funding package includes a £140 million pilot scheme that will allow Mayors to help connect young people with apprenticeship opportunities.
The impact of this initiative will depend on how it is delivered at a local level, but it is intended to offer additional support to employers when recruiting apprentices and accessing suitable candidates.
Foundation Apprenticeships and Short Courses
Further foundation apprenticeships are set to be introduced in sectors such as retail and hospitality.
Foundation apprenticeships were first launched in May 2025 and aim to bridge the gap between education in schools or colleges and the workplace, helping young people become work-ready. These may be particularly useful for businesses that currently invest significant time in initial training.
From April 2026, apprenticeships will also allow for the introduction of short courses, providing more flexible training options that can better align with business needs. In addition, a new Level 4 apprenticeship in AI will be launched, supporting the development of advanced skills within the workforce.
In Review
While it will take time for these reforms to have a noticeable impact, it may be worthwhile reviewing whether fully funded apprenticeships for under-25s could help meet your recruitment requirements.
Further announcements on apprenticeships may follow in the coming months, as the Government has confirmed that the Department for Work & Pensions and Skills England will work with businesses to strike the right balance between increasing apprenticeship starts for young people and delivering flexibility for employers.
