From 1 August 2026, three changes to the Growth and Skills Levy — the government's reformed apprenticeship spending offer — reshape how you fund delivery, and with it how you should staff it. The 10% government top-up on new levy funds has stopped; new funds entering your account now expire after 12 months rather than 24 (funds already in the account on or before 31 July 2026 keep the 24-month window); and a levy payer whose account runs dry now co-invests 25% of the training cost rather than 5%, with government paying 75%, for starts from 1 August 2026. That 25% is narrower than the headlines suggest: an employer who does not pay the levy still co-invests 5% for an apprentice aged 25 or over, and nothing at all for a 16- to 24-year-old, whose training and assessment government funds in full up to the funding band maximum — and from October 2026 non-levy employers can claim up to £2,000 for recruiting a new apprentice aged 16 to 24. The levy tax itself is unchanged. The staffing consequence: tighter funds and higher co-investment sharpen every permanent-versus-interim and in-house-versus-subcontract decision about who delivers your apprenticeships.
These are the funding-offer rules in force from the start of the 2026–27 academic year, from the Department for Education's Growth and Skills Levy guidance. The levy tax — 0.5% of a pay bill above £3 million, collected by HMRC — is separate and unchanged. Rules apply to England.
What changed on 1 August 2026?
Four moves land together at the start of the 2026–27 academic year. Here they are side by side, with what each one replaced, so you can see the direction of travel before reading the staffing consequence.
| Change (from 1 August 2026) | Before | Now |
|---|---|---|
| Government top-up on new funds | +10% added to new levy funds | Top-up stops for new funds |
| Expiry of levy funds | 24 months | 12 months for new funds (funds held on/before 31 July 2026 keep 24 months) |
| Co-investment — levy payer with insufficient funds (starts from 1 Aug 2026) | 5% employer / 95% government | 25% employer / 75% government |
| Co-investment — non-levy employer, apprentice aged 25+ (starts from 1 Aug 2026) | 5% employer / 95% government | 5% employer / 95% government (unchanged) |
| Non-levy (SME) support | — | 16–24 fully funded; up to £2,000 for a new apprentice aged 16–24 from October 2026 |
Three details matter for planning. The 12-month expiry applies only to new funds: anything already in your account on or before 31 July 2026 keeps its original 24-month life, so the shorter clock is not retrospective. The higher co-investment applies to starts from 1 August 2026, not to apprentices already on programme — existing learners are unaffected. And the 25% figure is narrower than the headlines suggest: under the 2026–27 apprenticeship funding rules it applies where a levy payer has run out of funds in its apprenticeship service account. An employer that does not pay the levy still co-invests 5% for an apprentice aged 25 or over, and pays nothing for a 16- to 24-year-old, whose training and assessment the government funds in full up to the funding band maximum. Which rate you are quoting therefore depends entirely on which kind of employer you are talking to.
Does the levy tax itself change?
No — and this is the distinction that trips people up. The apprenticeship levy is a tax: UK employers with an annual pay bill over £3 million pay 0.5% of that pay bill, collected by HMRC through PAYE. None of that changed on 1 August 2026. What changed is the spending offer — "Growth and Skills Levy" is the government's brand for the reformed set of rules governing how those funds are topped up, how long they last, and what you co-invest.
So your bill to HMRC is the same; what you can do with the money that comes back has tightened. If you pay the levy, that reframes the funds in your account as a use-it-or-lose-it budget on a shorter clock. If you don't, the co-investment share you contribute on each start has moved. Either way, the useful question is no longer "what is the levy?" but "what does the new offer mean for how we resource delivery this year?"
With new funds now expiring after 12 months, the pressure is on to convert funding into starts before it lapses — and that only happens if the delivery staff are already in post. If you need trainers, coaches or assessors in place to use the funding you hold, talk to a team that recruits only in this sector.
What do the changes mean for staffing delivery?
Read together, the changes push the same conclusion: the funds are tighter and each start costs you more, so the quality and timing of who delivers matter more than they did. Three consequences follow for workforce planning.
First, the 12-month clock on new funds rewards getting delivery moving quickly. Money that would once have sat for two years while you built capacity now expires in twelve months, so the delivery workforce — trainers, skills coaches, assessors — needs to be in place when starts begin, not recruited months after the funding lands. A vacancy that delays a cohort is now a vacancy that can cost you the funding.
Second, higher co-investment raises the stakes on completion — for levy payers especially. Each apprenticeship standard has a funding band that caps the training cost; co-investment is the slice of that you cover yourself, and for a levy payer who has spent its account balance that slice is now 25% rather than 5%, so more of every start comes from your own budget. That turns the staff who get apprentices to gateway and through end-point assessment — rather than the ones who lose them halfway — into a direct financial question, not only a quality one.
Third, the non-levy support pulls demand the other way. With training and assessment fully funded for apprentices aged 16 to 24, and up to £2,000 for recruiting one from October, smaller employers have more reason to take apprentices on — which feeds provider and subcontractor demand for the coaches and assessors who support them. For the fuller picture of what the reformed offer covers, see our guide to the Growth and Skills Levy and staffing delivery.
Weighing up whether to grow your own delivery team or bring in cover for the new funding year? Speak to a team that has staffed FE and skills delivery through every funding reform.
Permanent, interim or subcontract — how the maths shifts?
None of this dictates a single staffing model, but it does change how the sums come out. The tighter fund expiry favours moving fast: if a cohort has to start before funds lapse and you don't have the delivery capacity, interim and contract cover can put an experienced assessor or coach in front of learners in weeks, rather than risk losing the funding to the clock. That is a different calculation from a permanent hire you take your time to get right.
Higher co-investment sharpens the make-versus-buy question. Subcontracting delivery to another provider carries its own management fee and quality risk, and with more of each start coming from your own budget the margin for a subcontract arrangement that underperforms is thinner. Building delivery in-house means the right permanent hires — and in shortage areas such as assessing and internal quality assurance, that is easier said than done. Our view on why assessor and IQA roles are hard to fill, and where permanent beats interim goes into that trade-off in depth.
The honest answer for most providers is a mix: permanent staff for the core, interim cover for the peaks and the funding-window gaps, and subcontracting kept for what you genuinely can't deliver yourself. We work across all three — permanent, interim and executive search for FE and skills — and the right split depends on your funding profile and your delivery calendar, which you can talk through with us via our services for employers.
Deciding between a permanent hire, interim cover and subcontracting to fill a delivery gap this year? Talk to us about the staffing option that fits the new funding maths.
Frequently asked questions
Has the apprenticeship levy tax rate changed on 1 August 2026? No. The levy is a tax of 0.5% on the part of an employer's pay bill above £3 million, collected by HMRC, and that rate and threshold are unchanged. The 1 August 2026 changes are to the Growth and Skills Levy spending offer — the top-up, fund expiry and co-investment — not to the tax you pay.
How long do new levy funds last now? New funds entering a levy account expire after 12 months, halved from the previous 24. Funds that were already in the account on or before 31 July 2026 keep their original 24-month expiry, so the shorter clock applies only to money that arrives from 1 August 2026 onwards.
What is the employer co-investment rate from 1 August 2026? It depends on the employer. For starts from 1 August 2026, a levy payer whose apprenticeship service account has insufficient funds co-invests 25% of the training cost within the funding band, with government paying 75% — up from the previous 5%/95% split. An employer that does not pay the levy co-invests 5% for an apprentice aged 25 or over, and nothing for an apprentice aged 16 to 24, whose training and assessment costs government funds in full up to the funding band maximum. The 10% top-up previously added to new levy funds has also stopped.
What extra funding is there for small employers who don't pay the levy? Non-levy employers get more support, not less. Government funds all training and assessment costs, up to the funding band maximum, for apprentices aged 16 to 24; co-investment for an apprentice aged 25 or over stays at 5%; and from October 2026 a non-levy employer can claim a payment of up to £2,000 for recruiting a new apprentice aged 16 to 24.
