The apprenticeship levy tax has not changed — UK employers with an annual pay bill over £3 million still pay 0.5% of it to HMRC. What has changed is how that money can be spent. The Growth and Skills Levy is the government's reformed spending offer layered on top, and for colleges and training providers the useful question is not the tax — it is what the reforms mean for how you staff delivery. Shorter and foundation apprenticeships, more flexible funding, and a tighter spending clock since 1 August 2026 all shift the mix of assessors, trainers and skills coaches you need, and when you need them. Below is what changed, what the new co-investment rate actually is — it depends on which kind of employer you are talking to — and, the part gov.uk's definition leaves out, how each reform lands on your delivery workforce.
Funding figures and dates below come from DfE's Growth and Skills Levy guidance and the apprenticeship funding rules for 2026–27, which took effect on 1 August 2026. Rules apply to England. Confirm the position for your own delivery year against the latest DfE rules before you plan spend.
What is the Growth and Skills Levy — and what has actually changed?
The Growth and Skills Levy is a reform of what the apprenticeship levy can pay for — not a new tax. The levy itself is untouched (0.5% of pay bill over £3 million, collected by HMRC); the reform sits on the spending side — the types of training the levy can fund and the rules for using it. gov.uk owns the full definition, so we will keep ours short and point it where it matters: every one of these reforms changes the delivery workforce a provider needs to hire and keep.
Several changes landed ahead of the 2026–27 rules:
- Foundation apprenticeships — a new entry-level offer, available since 1 August 2025.
- Minimum apprenticeship duration cut from 12 to 8 months, in place since August 2025.
- Relaxed adult (19+) English and maths exit requirement — adults can now evidence competence through workplace tasks rather than being required to hold the qualifications.
- Non-apprenticeship flexibility — shorter, standalone training fundable through levy accounts from April 2026.
The standards your staff actually deliver and assess against are now owned by Skills England, which took over from the abolished IfATE in June 2025 — a change with its own hiring consequences, which we cover in what Skills England means for FE hiring.
What changed on 1 August 2026?
This is the distinction that trips providers up, so it is worth being exact. Until 31 July 2026 the familiar rules applied: employers received a 10% government top-up on funds, unused funds expired after 24 months, and once a levy balance was spent the employer co-investment was 5%. Three of those changed at once on 1 August 2026, and they are now in force.
| Levy rule | To 31 July 2026 | From 1 August 2026 |
|---|---|---|
| Government top-up | 10% added to funds | Top-up ends for new funds |
| Unused funds expiry | Expire after 24 months | Expire after 12 months (funds held on or before 31 July 2026 keep the 24-month window) |
| Co-investment — levy payer with insufficient funds | 5% employer / 95% government | 25% employer / 75% government |
| Co-investment — non-levy employer, apprentice aged 25+ | 5% employer / 95% government | 5% employer / 95% government (unchanged) |
| Non-levy employer, apprentice aged 16–24 | Co-investment applied | Fully funded — government pays training and assessment up to the funding band maximum |
The 25% figure is narrower than the headlines suggest, and it is worth getting right before you quote it to a client. 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 government funds in full up to the funding band maximum. The higher rate also applies only to starts from 1 August 2026 — apprentices already on programme are unaffected. Which rate is correct therefore depends entirely on which kind of employer you are talking to. We cover the change and its planning consequences in more depth in what the 1 August 2026 levy changes mean for staffing delivery.
For a provider, the practical effect is a tighter spending cycle for the levy-paying employers you deliver for. A 12-month expiry window on new funds (down from 24) and a 25% co-investment charge on spend beyond the levy balance both push those employers to commit funds sooner and plan starts more deliberately — which flows straight into your delivery schedule and the capacity you need to meet it. Meanwhile full funding for 16- to 24-year-olds at non-levy employers pulls demand the other way, giving smaller employers more reason to take apprentices on. Providers that map expected starts against staff availability are the ones not scrambling for cover in the autumn.
What do shorter and foundation apprenticeships mean for your delivery workforce?
Shorter programmes change the rhythm of delivery — and who you need on the team. An 8-month minimum duration (since August 2025) means cohorts start and complete faster than the old 12-month floor allowed. More frequent starts and completions pack more onboarding, gateway reviews and end-point assessment into shorter windows — so demand rises for assessors and skills coaches who can turn cohorts around at pace. That pressure is landing in an already tight market, where providers increasingly weigh permanent versus interim assessor and IQA cover to protect delivery windows.
Foundation apprenticeships (live since August 2025) bring in learners at an earlier stage, who typically need more coaching and pastoral support to progress — raising demand for skills coaches, learning mentors and trainers comfortable with lower-starting-point cohorts. The relaxed adult English and maths requirement shifts what functional-skills staff do: less exam preparation, more embedded support evidenced through workplace tasks. And the non-apprenticeship flexibility from April 2026 — short, standalone units rather than full programmes — points towards more modular delivery, which many providers will resource through sessional or associate trainers rather than only permanent full-programme staff.
None is a headline reform on its own, but together they move a delivery team towards flexible, fast-turnaround capacity — a recruitment brief, not just a curriculum one.
How does the Level 7 funding restriction reshape higher-level staffing?
The most abrupt staffing shift sits at the top of the framework. Since 1 January 2026, government funding for new Level 7 (master's-level) apprenticeship starts is restricted by age: it applies only where the apprentice is aged 16–21 (with narrow exceptions for 22–24s who have an EHC Plan or are care-experienced). Apprentices who started before 1 January 2026 keep full funding to completion. But because DfE data showed around 89% of previous Level 7 apprentices were aged 22 or over, most of the old cohort no longer qualifies for levy funding.
For providers delivering Level 7 and degree apprenticeships — senior leader, accountancy, management and similar routes — this reshapes the higher-level delivery team. The funded pipeline for adult Level 7 starts narrows sharply, which affects how many specialist Level 7 tutors and assessors you can sustain, and whether you redeploy that expertise to lower levels or to commercially funded routes.
The flip side is a candidate's market. As these reforms raise demand for assessors, trainers and skills coaches, experienced delivery staff have real choice about where they work — so if you are weighing your next move in FE and skills, it is a strong time to look.
How should providers plan delivery staffing now the changes are in force?
The through-line across every reform is the same: plan spend and delivery capacity together, and do it ahead of the delivery year, not into it. The 1 August 2026 changes reward levy-paying employers who commit funds earlier, so providers need the staff in place to deliver those starts on a compressed timeline — the delivery capacity each reform demands, lined up ahead of the year rather than scrambled for during it.
In our experience, providers who treat a funding change as a workforce-planning exercise — moving on the hardest-to-fill roles before the market tightens around a fixed date — come out of it well. The ones who leave it find the assessors and skills coaches they need have already been hired by someone who planned earlier.
How Aptitude can help
We recruit only in the Further Education, skills, apprenticeships and employability sectors, so we understand how a funding reform turns into a staffing problem — because we have worked in this world. When a shorter duration, foundation apprenticeships or a Level 7 restriction changes the capacity you need, we help you find the assessors, trainers, skills coaches and quality staff to match it. See our advice for employers and the sectors we cover, and get in touch for a confidential conversation about your delivery plan.
Frequently asked questions
Is the Growth and Skills Levy a new tax? No. The underlying apprenticeship levy is unchanged — employers with a pay bill over £3 million pay 0.5% of it to HMRC. The Growth and Skills Levy reforms how that money can be spent; it is not a new or higher charge.
What changed on 1 August 2026? Three things changed together: the 10% government top-up ended for new funds, new levy funds now expire after 12 months instead of 24 (funds held on or before 31 July 2026 keep the 24-month window), and co-investment rose for one group of employers. That last one is the part most often reported wrongly: a levy payer whose apprenticeship service account has insufficient funds now co-invests 25% of the training cost, with government paying 75%. 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 government funds in full up to the funding band maximum. The higher rate applies to starts from 1 August 2026, not to apprentices already on programme.
How do the levy reforms affect how providers staff delivery? Shorter (8-month minimum) and foundation apprenticeships mean faster cohorts and more frequent gateway and end-point assessment activity, raising demand for assessors and skills coaches. Non-apprenticeship flexibility points to more modular delivery, often resourced through sessional trainers, and the tighter spending clock from 1 August 2026 pushes providers to line up capacity earlier.
Are Level 7 apprenticeships still funded? Funding is now limited. Since 1 January 2026, new Level 7 (master's-level) apprenticeship starts are funded only for those aged 16–21, with narrow 22–24 exceptions (an EHC Plan or care-experienced); starts before that date keep full funding to completion. Around 89% of previous Level 7 apprentices were aged 22 or over, so most new adult starts are now outside funding.
Who owns apprenticeship standards now that IfATE has gone? Skills England owns occupational and apprenticeship standards and assessment plans, having taken over from IfATE, which was abolished in June 2025. When you plan delivery staffing, it is Skills England's standards your teaching and assessing staff work to.
