Growth & Skills Levy Reforms: What this new era of funding means for your organisation
Changes to be aware of
The Autumn Budget announced by the UK government in November 2025 marks the biggest shift for apprenticeships and skills funding in almost a decade. From tighter levy timelines, to the introduction of modular apprenticeship units, employers of all sizes will feel the effects of these reforms from 2026 onwards.
Though this changing landscape may feel complex, it actually opens the door to more flexible, efficient, and future-focused workforce development.
Join tend as we outline what’s changing, how you can prepare, and what you can do to ensure your teams thrive in the New Year.
A new chapter for skills funding
The Budget signals a move toward a more responsive, precision-focused skills system. Funding will be tracked more closely, and timelines will tighten; however, employers will gain access to targeted, modular learning options for the first time ever.
tend sees this moment as more than a policy update. It’s also an opportunity for employers to strengthen their training strategies, making funding work harder, and ensure their workforce is equipped for any challenges ahead, especially in sectors where there’s rapid change, such as health and social care.
What do the updates mean for large employers?
Larger, levy-paying businesses will experience several important changes. While the fundamentals of the levy remain in place, planning, tracking, and deploying funds will need to evolve. For example:
- A more precise levy pot – From 2026, the government top-up will be removed. This means levy accounts will reflect employer contributions exactly as they’re paid. This places greater emphasis on maximising every penny through careful planning, prioritisation, and programme selection.
- A shorter window for using funds – Levy funding will now expire after 12 months, instead of 24. This significantly accelerates the pace for organisations scheduling training. Employers will need to keep a closer eye on monthly contributions, expiry profiles, and future workforce needs, to prevent the loss of funds due to timings.
- Increased employer contribution beyond the levy – When your levy balance runs out, the government’s co-investment support for additional apprenticeship training will also reduce. Employers will now contribute 25% rather than 5% towards further training costs.
These changes make it more important than ever to forecast levy usage carefully, and avoid unplanned overspend.
What do SMEs need to know?
For small and medium-sized businesses, the Budget includes one of the most significant expansions in apprenticeship access to date.
Through the Youth Guarantee, training for apprentices aged 16-24 will now be fully funded, removing a major financial barrier to developing early-career talent.
The threshold has been extended from under-22, to under 25 years of age. This means even more young people can access high-quality training at no cost to their employers.
For smaller employers, especially in the care sector, this represents a powerful opportunity to bring new people into the workforce, grow talent from within, and strengthen long-term staffing pipelines without upfront spend.
A more flexible way to upskill
Perhaps the most transformative element of the reforms is the introduction of Apprenticeship Units, launching in April 2026. These short, modular training blocks are drawn from existing apprenticeship standards, allowing levy-paying employers to invest in exactly the skills they need, when they need them, without the time commitment of a full apprenticeship programme.
To begin with, Apprenticeship Units will initially focus on areas such as:
- Artificial intelligence (AI)
- Digital technologies
- Engineering and technical support
Once the system has been established, it will role out to include further areas of training, such as health and social care. When that happens, tend will be ready.
This modular approach supports:
- Faster upskilling of experienced staff
- Reduced time away from operational duties
- Targeted capability-building in priority areas
- The ability to test progressions routes before committing to longer programmes
For employers, this level of agility could be a game changer.
Preparing for 2026
With these changes fast approaching, now is the time to review your training strategy and funding position. Here are 4 areas we recommend you prioritise:
- Build complete visibility of your levy – look at expiry timelines, planned programme starts, areas of risk, and incoming monthly contributions. Early analysis will help you make more informed decisions.
- Prioritise high-impact programmes – focus on training that aligns directly with your workforce plan and organisational goals.
- Work with partners who can deliver flexible learning – as modular training becomes more readily available, employers will need providers who can pivot quickly, design blended learning pathways, and support both units and full qualifications. tend is already aligning its delivery models to ensure full readiness for 2026 and beyond.
- Prepare Line Managers for shorter learning cycles – modular training means more frequent, shorter interventions. Line Managers will play a vital role in enabling access to learning, and embedding new skills into their teams.
All in all, these changes look set to usher in a new era of training, where it’s possible to pick and choose the elements from apprenticeship standards that apply most to the learner’s role.
tend is here to help
We are committed to helping employers navigate the Growth & Skills Levy changes with confidence. As a national training provider and sector specialist, we’re preparing our programmes, systems, and delivery models for the future of modular learning.
tend will support you every step of the way, ensuring flexible learning aligned to national standards, designed to evolve as Apprenticeship Units are introduced. We’ll also be able to provide guidance on forecasting, expiry monitoring, and strategic planning to help you protect and maximise your funding.
As we have always done with full-length programmes, we will help you build learning journeys that align with your organisation’s priorities, and the learners needs – whether their courses are bite-sized or otherwise.
Final thoughts
The new Growth & Skills Levy reforms signal a more agile era for training and development. Whilst larger employers will need to adapt quickly to the revised guidelines, both levy payers and SMEs stand to benefit from greater choice, clearer progression routes, and more efficient pathways to building workforce capability.
With the right training provider to guide you, this could truly be a catalyst for growth, transformation, and long-term talent development.
Want to know more about these changes and what they could mean for your organisation? tend is here to help. Reach out to our team on 01753 596 004, or hit the button below.
