Growth and Skills Levy 2026 Explained: A Practical Guide to Reform and Leadership Training Alternatives
- 17 hours ago
- 5 min read
Updated: 2 hours ago
By Lee Childs, Joint CEO, NC Group
The government’s latest apprenticeship reforms, introduced through the Growth and Skills Levy, represent one of the most significant changes to skills funding we’ve seen in recent years.
As both an employer and a training provider, I’ve been reflecting on what these changes mean in practice, not just for organisations like ours, but for the employers and learners we work with every day.
Put simply, it isn’t just a change to apprenticeships. It’s a shift towards a broader, more flexible skills system, one that gives employers more choice, but also requires more informed decision-making.
April 2026 Growth and Skills Levy Reforms: What has Changed for Employers and Training Funding?
Several key changes have already come into effect. One of the most important is the introduction of apprenticeship units. These are shorter, more flexible training programmes, typically delivered over several weeks rather than months, that allow employers to upskill existing staff in targeted areas such as engineering, digital, and AI.
It is a significant shift, as historically, levy funding was for full apprenticeship programmes, but now it can also support shorter, focused training aligned to specific business needs.
However, these units complement apprenticeships, not replace them, meaning employers will need to strike the right balance between short-term skills needs and long-term workforce development.
There have also been positive funding changes for smaller businesses. SMEs can now access 100% government funding for apprentices aged under 25, removing the previous 5% employer contribution. For many, this will make apprenticeships more accessible and commercially viable.
At the same time, the defunding of 16 apprenticeship standards marks a clear shift in priorities. Most notably, leadership and management programmes, such as Level 3 Team Leader and Level 5 Operations Manager, have been impacted. As these were popular courses, their removal leaves a gap that employers now need to address.
August 2026 Apprenticeship Reforms: Funding Changes Employers Need to Know
Further reforms coming into force in August will impact how employers plan and fund training.
If an employer exhausts its levy funds (the pot of money larger organisations pay into for training), the co-investment rate for further training will increase. Employers will need to contribute 25% of training costs, with the government covering 75%, a significant shift from the previous 5% contribution.
For non-levy paying employers (typically smaller businesses), there is good news. Apprentices aged 16–24 will now receive full funding, and we expect further financial incentives for hiring younger apprentices later in the year.
Other important changes include:
Levy funds will expire after 12 months instead of 24, increasing the need for planning.
The removal of the 10% government top-up on levy contribution.
The minimum apprenticeship duration will be reduced from 12 months to 8 months, allowing for more flexible delivery.
Combined, these changes place greater emphasis on strategic workforce planning. Employers will need to think more carefully about how and when they invest in training.
What’s Next for Leadership and Management Training After Apprenticeship Reform?
For me, one of the most pressing challenges is the removal of key leadership and management apprenticeship standards.
Combined, these programmes accounted for over 25,000 starts in 2024/25, so their defunding leaves a significant gap for employers looking to develop their managers and future leaders.
So, what are the options?
1. Alternative Apprenticeship Standards
We’re already seeing providers and employers switch to alternative apprenticeship standards and incorporate leadership and management content within them. A good example of this is building leadership modules into the Level 4 Process Leader programme.
However, there are risks with this approach. The Level 4 Process Leader standard is designed specifically for production-based roles, due to the knowledge, skills and behaviours (KSBs) required.
From my perspective, applying this standard to non-production roles is something I would strongly advise against. If the learner doesn’t have the right scope of work or opportunity to develop those KSBs, they won’t meet the gateway requirements.
For any employer considering alternative standards, it’s critical to ensure the programme genuinely aligns with both the role and the learner’s responsibilities, and that there is sufficient scope to develop and demonstrate the required competencies.
2. Government Funded programmes
Where providers have access to funding for leadership and management courses, this can be a viable alternative to apprenticeships.
These courses are often funded at Levels 2 and 3. They are sector-based, shorter, more focused programmes designed to support upskilling, particularly for employees moving into new roles or taking on additional responsibilities.
These programmes are most often accredited training courses in which learners must clearly demonstrate achievement towards a nationally recognised qualification.
There are also delivery considerations. Providers must be approved to deliver these programmes at the appropriate level, typically only up to Level 2 or Level 3, due to the nature of the funding models.
For employers, the key is alignment to ensure that the funded training matches the needs of the business and the learner, and that the individual can realistically achieve the required outcomes at the appropriate level.
3. Employer-Funded Training
In my view, this is often the best fit for replacing defunded leadership and management apprenticeships.
Employer-funded training allows organisations to invest directly in programmes aligned to their needs. It could be through accredited routes such as ILM or CMI qualifications, or through bespoke leadership development programmes designed in partnership with a training provider.
The challenge, of course, is cost. Employers are required to fund the full programme themselves.
However, it also provides certainty. It ensures that learners develop in the areas that matter most to the business, without the constraints or risks of trying to fit into an unsuitable apprenticeship standard.
My Advice to Employers on Apprenticeships and Workforce Training
As is often the case in education and skills, there is no one-size-fits-all approach to leadership and management development.
The most important thing is to start with the intent of the training, what you are trying to achieve, and what the learner needs.
If an alternative apprenticeship standard is a good fit, and the learner can develop and demonstrate the required knowledge, skills and behaviours, then apprenticeships remain a strong option.
If that isn’t the case, but the learner can demonstrate progression and meet the qualification requirements, then funded training programmes can be a very effective route.
However, where neither option is suitable, employers will need to invest directly in developing their leaders and managers through accredited or bespoke training programmes. At NC Group, we’re taking this approach ourselves. As an employer that invests in its people, we are carefully considering the best options for developing our future talent.
We believe that funding leadership and management training for our staff is the right decision for our business.
What the 2026 Apprenticeship Reforms Mean for Employers
The Growth and Skills Levy is ultimately about creating a more flexible, employer-led skills system. But employers now have more choices to navigate.
Understanding the options, aligning training to real business needs, and planning have never been more important.
If you’re unsure how these changes impact your organisation, or you’re reviewing your current training strategy, we’re here to help.
At NC Group, we work closely with employers to design training solutions that are practical, compliant, and aligned with long-term business goals.
Please get in touch at 01388 737121 or email training@ncgroupltd.co.uk.
