AELP welcomes ‘significant’ extra investment in apprenticeship programme budget

The Association of Employment and Learning Providers (AELP) has welcomed a significant increase in the apprenticeship programme budget for the year ahead – taking government apprenticeship funding through the £3bn mark for the first time.

Announced as part of a raft of reforms to the skills system, the boost to apprenticeship funding closes the gap between the amount raised by the Apprenticeship Levy, and the amount spent on apprenticeship schemes. This has been a key demand from AELP – including in its 2024 General Election manifesto. In recent years the amount clawed back by HM Treasury from the Apprenticeship Levy has reached £800m.

AELP has, however, expressed disappointment over the announcement that the government will defund Level 7 apprenticeships for those aged 22 and over. The government has said that, from January 2026, support for Level 7 apprenticeships will be limited to those aged 16-21 and existing apprentices. A move AELP believes could undermine the premise of what should be an employer led system.

The organisation has now called on the government to back learners and employers by expanding the new Foundation Apprenticeships product into everyday sectors – including hospitality and retail.

AELP has also responded to other changes announced today, including:

13 new level 2 construction courses for adults in non-devolved areas under the Free Courses for Jobs (FCFJs) scheme. FCFJ is currently at level 3 and has seen historic underspend, so this will give extra flexibility in how that money can be spent especially as there are significant skills gaps in construction.
£14m of adult skills funding (ASF) for construction to be devolved to local mayors for next academic year, expected to support up to 5,000 additional adult learners. Devolved ASF is currently worth £800m per annum, so £14m is approximately an extra 1.75%. This should be seen against the backdrop of an 6% cut in the overall ASF budget this year.
There will be £136m for Skills Bootcamps across a range of priority sectors in 2025-26, providing training to over 40,000 learners, including £100 million over a four-year period to expand Construction Skills Bootcamps. However, this still means we are now spending less now on Bootcamps than when the programme was first introduced.
The 32% increase in the Immigration Skills Charge, will be used to deliver up to 45,000 additional training places to upskill the domestic workforce and reduce reliance on migration in priority sectors. AELP hopes this means the government will allocate £200m to help tackle skills shortages, a welcome boost.

Ben Rowland, AELP CEO, said:

"Breaking through the £3bn mark is a significant milestone for the apprenticeship budget. We applaud this step and look forward to working with the Department for Education and HM Treasury to ensure even more of the Levy is used to deliver the skills that employers need and in ways that boost productivity and drive growth.
"The Level 7 announcement, while not a surprise, is still a disappointment, especially for those who are young but happen to be 22 and over. However, delaying implementation to the start of 2026 is a sensible step and gives some time for adjustment.
"Foundation Apprenticeships could be an impactful route into employment for young people. However, if government is serious about getting more young people – and those at entry level - into high quality training programmes, then everyday sector areas like hospitality and retail need to be the next area of focus. There will be lots to learn from the first round to make this a continually improving new initiative and we’d encourage government to push forward with this."

ENDS

Notes to editors

The Apprenticeship Levy raised £4.1bn in 2024/25, with the OBR predicting this will rise to £4.8bn by 2029/30. The apprenticeship budget before this announcement was £2.7bn, with approximately £500m shared with the devolved administrations. This means Treasury was top slicing around £800/£900m a year from the Levy. Today’s announcement that the apprenticeship budget will increase to £3.075bn will be funded through reducing the top slice in the levy, but the top slice will remain at around £600m, money raised for skills not spent on skills.

The Association of Employment and Learning Providers (AELP) is a national membership body, proudly representing organisations operating in the skills sector. AELP members deliver a range of training and vocational learning – including the majority of apprenticeships as well as Skills Bootcamps, 16-19 Study Programme, Adult Education Budget and more.

For further information or interviews please contact Matt Strong, Communications Manager, AELP, on 07920 161685 or [email protected]