Apprenticeship Funding Rules 2026/27: Are AELP’s priorities starting to land?

As the DWP prepares the 2026/27 Apprenticeship Funding Rules, expected next month, AELP continues to play a central role in working with officials to shape the framework that underpins the apprenticeship system each year. Through sustained engagement on behalf of members, we have consistently pressed for changes that make the rules clearer, more workable in practice and better aligned with the realities of delivery.

The latest update – given in a recent DWP workshop - suggests encouraging movement on a number of long-standing priorities raised by AELP and our members. While not every proposal outlined in the workshop has yet translated into confirmed policy, the direction of travel reflects the impact of those discussions and the continuing influence of member insight in shaping how the system operates.

So, where might we see changes when the funding rules are published?

Visa and residency eligibility rules: Providers asked for a more pragmatic and flexible approach to visa-related eligibility—particularly where learners can provide credible evidence that their visa is in the process of being extended. The recommendation by DWP is to move in this direction with clearer and more proportionate evidence expectations. This directly responds to member concerns about mid-programme withdrawals and unnecessary barriers to learner participation.
Co-investment and completion payments: AELP members consistently highlighted the administrative burden created by linking completion payments to the early collection of co-investment. The Department recommends that this link will be removed for 2026/27 —almost exactly as AELP proposed. This would reduce compliance risk, remove a point of friction for employers, and improve provider cashflow management. Final details of how any change will be implemented is still to be confirmed.
Ordinarily resident rule
Providers requested clearer expectations around residency evidence to avoid inconsistent audit interpretation. The recommendation here is for the updated rules to offer strengthened definitions and more transparent requirements, providing greater certainty for both providers and learners.

And where are AELP continue to push for further changes:

Administrative duplication: While we hope the new rules will improve clarity—particularly in relation to ILR and DAS processes—we do not expect the full removal of duplicate employer signatures and repeated evidence steps. This is a priority area for AELP, and we will continue to push for simpler, more efficient processes that remove unnecessary burden.
Functional Skills and initial assessment: Members asked for more flexible evidence requirements and a reduction in retesting. AELP would like to see a more proportionate and learner-centred approach but, while we expect the updated guidance will provide greater clarity, we will not see substantive rule changes in this area.
Subcontracting flexibility: While clarity has improved, the wider flexibilities requested—such as de minimis subcontracting without APAR registration—are still being explored. AELP remains engaged on these issues and continues to represent member views strongly.
Learning support funding: The Department has acknowledged the concerns raised by AELP and members around the adequacy of the mainstream £150 rate and the need to fund initial assessment activity. Although no uplift has yet been confirmed, the issue remains under active review, and AELP will continue to advocate for a funding model that reflects the real cost of supporting learners with additional needs.
Ongoing engagement and next steps: Although not every suggestion has yet resulted in firm policy change, AELP continues to work closely with policymakers to ensure member feedback is fully understood and taken into account as the rules continue to evolve. The progress already achieved demonstrates the strength of a collective, evidence-led voice—and reinforces the importance of sustained engagement from the sector.

Thank You to Our Members

It is important to note that without the providers who have contributed insights, evidence, and lived experience throughout this process, it is unlikely we’d have been so successful in persuading DWP officials to make these recommendations. Your engagement is helping shape a more practical, fair, and responsive funding system. While there is further work that needs to be done, the changes recommended by DWP demonstrate the power of AELP and its members working together to influence policy and deliver improvements for learners, employers, and providers alike.

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]