The government’s decision to cut Level 7 apprenticeship levy funding for apprentices aged over 21 will cost UK employers around £214 million in additional training costs.
With 89% of Level 7 apprentices aged over 21, research from the University Vocational Awards Council (UVAC), the higher and degree apprenticeship organisation representing more than 80 universities, also reveals the extent to which cuts will widen the skills gap, hinder social inclusion and stifle economic growth.
Level 7 apprenticeships, which are equivalent to a Master’s degree and help firms to upskill and develop future managers, business leaders or fill specialist roles, have been increasing in popularity. However, education secretary Bridget Phillipson announced last month that from January 2026, only people aged 16-21 can be funded.
Level 7 apprenticeships
Higher-level apprenticeship funding to be limited to under-22s
Scrapping Level 7 apprenticeship funding is a ‘major blow’
Employees want more upskilling and apprenticeships to narrow the skills gap
The latest data from UVAC reveals that year-on-year Level 7 apprenticeship starts have risen 13% in the past three years, and 5% in the last 12 months.
Last year, the National Foundation for Educational Research found that 90% of roles across all sectors will require higher-level skills by 2035, highlighting how employers are increasingly dependent on degree apprenticeships at Levels 6 and 7.
Dr Mandy Crawford-Lee, chief executive at UVAC, said: “The government’s policy to remove vital levy funding – that is supporting nine in 10 Level 7 apprentices – is a major blow to employers and will leave them facing both huge training bill costs and a skills shortage headache.
“This funding black hole is at a time when Level 7 apprenticeships have been growing in popularity year-on-year and are critical to driving wider economic growth. They’re also proven to enhance social mobility, giving individuals from underserved communities a clear career pathway, access to higher education and the skills to achieve their full earning potential in senior-level positions.
“This new policy ultimately feels like a contradiction to Labour’s Industrial Strategy, where it insists there will be ‘no glass ceiling on the ambitions of young people’ in Britain.”
Skills progression
Although spending on Level 7 had stagnated under the previous government, it still accounted for around 10% of the Department for Education’s overall apprenticeship budget.
Crawford-Lee added: “Removing funding for those Level 7 apprentices aged over 21 indicates to us that the government is unfortunately not looking to prioritise the career and skills progression of employees at every stage of their working life.
“It’s disappointing that the government places such little emphasis on the link between skills and productivity. We simply don’t believe that reducing Level 7 funding eligibility will make lower-level apprenticeships more attractive to employers, or more importantly, reduce the number of young people not in employment, education or training (NEETs).
“It would seem that tackling NEETs is now the government’s policy priority at the expense of developing the skills provision needed for a highly skilled, world-beating economy.”
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