Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what assessment his Department has made of (a) the impact of reducing government co-investment in apprenticeships once levy-paying employers have exhausted their levy funds, and (b) the impact of removing the uplift to levy accounts.

As we introduce new products, such as apprenticeship units and foundation apprenticeships, we are also simplifying the Growth and Skills Levy, improving its transparency, and making it more efficient.

From August 2026, we are removing the 10% top-up for levy-paying employers, changing expiry of levy funds to 12 months, and changing the government’s co-investment rate from 95% to 75% for levy-paying employers once they have exhausted all their funds.

Levy-paying employers will still be able to benefit from a very generous government contribution once their funds are exhausted, but it is right that employers who utilise all their levy funds contribute more to apprenticeship training and assessment.

These changes will ensure funding is available to roll out further flexibility for business and increase opportunities for young people.

We continue to support SMEs to take on apprentices and for the first time we will be fully funding the cost of training eligible apprentices aged 16-24 at non-levy paying employers (essentially SMEs). From August 2026, training and assessment will be completely free for SMEs who hire young people, boosting starts and reducing bureaucracy for both SMEs and training providers.

We will carefully monitor the impact of these changes once they take effect.