Employers’ bodies have criticised today’s announcement that, from January 2026, the apprenticeship levy can no longer be used to fund new Level 7 apprentices unless they are under 22.
In the autumn, when scrapping Level 7 apprenticeship funding was first mooted, NHS Employers wrote to the Department for Education, warning of the implications for the health service.
This morning, Danny Mortimer, chief executive of NHS Employers, said: “The NHS provides one third of all apprenticeships in the public sector, reinvesting the levy it pays to the Exchequer in programmes across all areas of our workforce.
Level 7 apprenticeships
Higher-level apprenticeship funding to be limited to under-22s
“There will be real concern in the NHS at the ending of funding from the levy for Level 7 apprenticeships for anyone aged over 21 – a route which has provided an increasingly important method of investment in experienced clinical staff to receive education which supports advanced practice in nursing and allied health professions.”
NHS Employers had asked for an exemption for the “strategically vital qualifications” and said there is a worry that this decision now creates an additional financial burden for the NHS.
“The forthcoming 10-year plan and associated workforce plan will set out ambitious priorities to shift and transform healthcare,” he added. “This decision risks running counter to these aspirations, and we look forward to the chancellor identifying other ways to support this essential education.”
Lizzie Crowley, senior skills adviser at the CIPD, said: “The decision to restrict government funding for all Level 7 apprenticeships to those aged 16 to 21 is unlikely to meaningfully boost youth participation, given that fewer than one in 10 apprentices who train at this level fall within this age bracket.
“While the aim of rebalancing the system towards young people is important, this blunt approach risks undermining the breadth and ambition of the apprenticeship offer. We have previously argued for a more nuanced approach to managing the cost of delivering higher-level apprenticeships, for instance, via reduced subsidies for older apprentices.”
Senior leadership training
Petra Wilton, director of policy at the Chartered Management Institute, said: “While the decision to significantly cut funding for Level 7 apprenticeships remains a disappointment, the priority now must be to support the learners already enrolled or preparing to start programmes. These include people in vital public services such as the NHS, education and policing.
“The government’s decision to restrict Level 7 funding to those under 21 does not address the UK’s ongoing skills gap in management capability.”
She said that the decision wipes out virtually all funding for senior leader apprenticeships, and that early-career learners are not at the stage in their working lives to undertake senior leadership training.
She added: “Independent research found that Level 7 senior leader apprenticeships are a key driver of multi-million-pound economic growth and social mobility across the UK. They are overrepresented by people who were on free school meals and who were the first in their families to go to university. These raise aspirations and offer tangible gains for hard-working families across the country.
These changes, coupled with uncertainty over the implications for employers of the Employment Rights Bill, increasing costs to employers, and future UK visa constraints, mean that we have significant concerns about this decision restricting UK economic growth” – Alan Vallance, ICAEW
“We want to work constructively with ministers to ensure the apprenticeship system and the wider skills agenda can deliver the higher-level skills that UK employers tell us they desperately need. to grow the economy.
“With Level 7 funding now cut, other routes must continue to deliver those advanced skills our economy depends on. That means ensuring the Growth and Skills levy can flex to ensure that workers at every age and stage of their working lives get a chance to improve their skills. The much-needed focus on young people needs to go hand in hand with a commitment to the millions of people already in work across the UK.”
Growth and skills levy
Recruitment and Employment Confederation chief executive Neil Carberry said: “A greater targeting of funds on younger people is essential to protect their pathways into work, and offers greater stability and clarity in apprenticeship policy.
“Yet the changes announced today do not progress us on the real challenge that has driven down apprenticeship opportunities for young workers which is the poor design of the apprenticeship levy.
“Fixing the levy with real progress on a new Growth and Skills levy is a big task but offers a big reward for people and employers. Firms are increasingly frustrated by the lack of progress on this. A greater embrace of shorter, modular courses and collaboration with employers is the way to maximise the talent in this country, and is essential for industries from healthcare to construction.”
Alan Vallance, chief executive of the Institute of Chartered Accountants in England and Wales (ICAEW), agreed: “This decision to scrap Level 7 funding for people aged over 21 will come as a major blow to the thousands who rely on this route into highly-skilled roles that support the wider economy.”
Average age is 22
He explained that the average starting age of a Level 7 ICAEW apprentice is 22, and that the unintended consequences of a policy that strips funding from this cohort will undoubtedly have a profound impact for firms, the skills pipeline and the health of the wider economy.
“While we understand and support the idea of an age concession, the likely effect of a 16-21 exemption is a skew in recruitment towards school leavers, who typically follow a longer pathway to qualification as a chartered accountant,” he said.
“These changes, coupled with uncertainty over the implications for employers of the Employment Rights Bill, increasing costs to employers, and future UK visa constraints, mean that we have significant concerns about this decision restricting UK economic growth. Not only will this impact the attractiveness of recruitment into the professional services, it runs the risk of UK businesses choosing to offshore work.
“It also flies in the face of the government’s commitment to its growth agenda, especially after it included professional and business services as a key growth-driving sector in the new industrial strategy. Skills are critical to the growth prospects of businesses and economic growth, and apprenticeships help to close that skills gap – so they must be protected and enhanced at all costs.”
He said the institute will work closely with firms, apprentices and training providers to help them navigate this period of change, and remain committed to an open dialogue with Skills England and employers to ensure access to talent is protected.
“However, our position remains that an age exemption of 18-25 would be an effective compromise that supports the government’s wider objective for growth. We would urge the government to closely monitor these changes through the lens of economic growth and reconsider if they have been effective in a year’s time.”
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