Apprenticeship Funding is Changing: What Employers Need to Know in 2026
Apprenticeships remain one of the most effective ways to build capability within your workforce. However, the funding system that underpins them is changing significantly in 2026, and these changes will require a more deliberate and commercially focused approach from employers. This is not a marginal policy shift. It represents a clear change in direction from government, with funding being more tightly targeted, more time-sensitive, and increasingly focused on younger entrants into the workforce. For land-based employers, where recruitment challenges and skills shortages are well established, this creates a moment to reassess how apprenticeships are being used.
- Up to £3,000 in employer incentives
Available when recruiting younger apprentices, helping reduce upfront costs. - Training costs fully funded (under 25s)
For many employers, particularly SMEs, there is no cost for training. - National Insurance savings
No employer NI contributions for apprentices under 25.
A more attractive financial offer for employers
The most important shift is the level of financial support now available when hiring apprentices. Employers recruiting younger apprentices can now access direct financial incentives, alongside significantly reduced training costs. In many cases, particularly for small and medium-sized businesses, the training element of an apprenticeship can be fully funded for those under 25. Additional payments are available when recruiting 16–18-year-olds, helping to offset the cost of supervision and onboarding, while National Insurance savings further reduce the overall cost of employment. Taken together, this means that for many roles, apprenticeships are now one of the lowest-cost entry routes into the workforce. This is particularly relevant in sectors where recruitment has become increasingly difficult or expensive.
A more time-limited levy
The Apprenticeship Levy is transitioning into the Growth and Skills Levy. While the headlines focus on increased flexibility, the more significant shift for employers is often being overlooked: you will have less time to spend your levy funds before they expire. Up to now, levy contributions have remained available for 24 months. Under the emerging model, that window is expected to reduce. In practical terms, this accelerates the pace at which funding must be committed and used. This changes the dynamic completely. Levy is no longer something that can sit in the background while plans are developed. If it is not actively deployed, it will be lost. For many organisations, this will expose a gap. Apprenticeship activity has often been reactive, driven by immediate vacancies or adhoc upskilling. That approach will not hold under a shorter funding cycle. The employers who will benefit most from these changes are those who treat levy as a strategic investment. That means having a clear pipeline of starts, aligning programmes to workforce planning, and committing funding with intent.At Capel Manor College, we are already working with employers to build structured apprenticeship plans that ensure levy is fully utilised within the available timeframe. This includes mapping workforce demand, identifying appropriate standards, and creating delivery models that work operationally.
Increased cost once levy is exhausted
Alongside this, the cost profile of apprenticeships is changing. Once levy funding has been used, employer contributions increase significantly. This makes it more important than ever that apprenticeships are aligned to clear business need and deliver tangible value. We are already seeing employers move towards more focused programmes, where apprenticeships are directly linked to workforce gaps, operational priorities, and long-term growth.
Stronger focus on younger talent
At the same time as tightening funding controls, the government is increasing incentives for employers to recruit younger apprentices. The direction of travel is clear: funding is being prioritised towards new entrants rather than existing workforce development. For land-based industries, this is particularly relevant. Many parts of the sector are facing an ageing workforce, and there has historically been a lack of structured entry routes for young people. These changes provide an opportunity to address that imbalance and build sustainable talent pipelines.
A narrower funding landscape
Not all apprenticeship standards will continue to be funded. Some programmes, particularly at higher levels, are being withdrawn or reduced, reflecting a broader policy shift away from senior-level qualifications and towards technical and entry-level skills. This means employers need to be confident that the programmes they are investing in will remain viable within the funding system, and that they are aligned to areas of national and regional priority.
A more flexible model emerging
Alongside these changes, there is a move towards more flexible training models. This includes shorter, more targeted learning approaches and delivery that better reflects the operational realities of employers. For land-based businesses, where work is often seasonal and site-based, this flexibility is welcome. It supports more practical, workplace-led delivery and reduces the disruption that traditional day release models can create.
What this means in practice
Taken together, these changes mean that apprenticeships are becoming more commercially driven. They require clearer intent, stronger alignment to workforce strategy, and a more proactive approach to funding. Employers who take the time to plan and engage early will be well positioned to benefit. Those who do not risk losing access to funding or facing increased costs.
Our approach at Capel Manor College
As London’s leading green skills provider, we are already adapting our apprenticeship offer in response to these changes. Our focus is on ensuring that programmes are relevant, flexible and closely aligned to employer need. We are working with employers across horticulture, landscaping, arboriculture and animal care to design delivery models that reflect how these industries operate, while ensuring that apprentices develop the professional competence required to succeed.
Book a conversation
If you are reviewing your workforce plans or simply want to understand how these funding changes will affect you, we would encourage you to speak with our team. A short conversation with one of our Employer Advisors will give you a clear view of what funding is available, what is changing, and how apprenticeships can be structured to support your organisation.
