The Autumn Budget and the Post-16 Education and Skills White Paper

Overview of Budget changes

Amidst the drama of the Autumn Budget, there were some major policy changes in relation to apprenticeships and skills. The beneficiaries of the changes were mostly SMEs and ultimately young people who are Not in Education Employment or Training. Levy paying employers will feel the brunt of the policy changes from 2026.

For SMEs:

check Apprenticeship training costs will be 100% funded for learners under 25 at SMEs.

Previously, SMEs received 100% funding for apprentices under 22, and 95% funding for apprentices 22 and over. So this change brings into scope 100% funding for apprentices aged 22-24. Note that Level 7 will not be funded as from 1 January 2026, and this new funding change for SMEs does not change that ruling.

Implementation date: August 2026.

For levy payers:

The Budget was less positive for levy paying businesses, through the change in funding policy as well as the threshold for paying of the levy not increasing from £3 million payroll a year.

close The shelf life of levy funds in an employer’s account will be cut from 24 months down to 12 months, at which point unused funds are returned to the Treasury. Note it’s only new funds from August 26 which will only have a 12 month life span, not funds already paid into the levy account before the implementation date in 2026.

close The levy uplift from the government of 10% after an employer had exhausted its own levy funds for apprenticeship training is being removed.

close The 95% co-investment for further apprenticeship training from government for employers who’d spent all their levy funds plus the 10% uplift will be reduced to 75% co-investment.

Implementation date: August 2026.

For all employers:

The Budget gave no detail on the much-anticipated Growth and Skills Levy Offer flexibility. As at 1 December 2025, we know that AI and Data short courses (which are being called 'apprenticeship units' by Skills England and DfE/DWP) will be part of the initial wave of flexibility.

What is contained in an apprenticeship unit and who is eligible to take them has yet to be confirmed by government. We will update this page once details are published.

check The apprenticeship minimum wage is increasing to £8 an hour.

Implementation date: April 2026.

Post-16 Education and Skills White Paper

The government's recent Post-16 Education and Skills White Paper provides a welcome strategic intent at a time of multiple policy announcements. At Kaplan Professional Education, we believe this is the moment for business and education to collaborate more closely than ever before, transforming policy intent into tangible results. For productivity reasons alone, the argument is undeniable that the workforce across almost all sectors of the economy needs upskilling.

More announcements are to come: assessment reform of apprenticeships is underway, with the Level 3 Accounting Assistant standard in the first group of three apprenticeships to trial the simplified assessment methodology. Uncertainty must be resolved for the higher-level standards, where the transfer from IFATE to the Department for Education to Skills England to DWP has resulted in delays to the much-needed updating of certain standards. The Curriculum Assessment Review by Professor Becky Francis has just been published, with V Levels already heralded in the White Paper as one method of simplifying the education system for the country’s young people.

But the calls to action on employers are extensive: from youth guarantees, to ‘stepping forward’ to fund more employee training, to offering T Level placements, to providing interviews for bootcamp students in devolved authorities.

Kaplan is urging the government to provide clarity that employers need on the financing of new initiatives, what incentives are to be paid and what co-funding is expected. And for investment for all providers of further education to be tangible, so that the words of encouragement within the White Paper become a reality.

Growth and skills offer

Flexible and modular learning become ‘apprenticeship units’

It’s apparent that a lack of information from the government on the nature of the apprenticeship units, their oversight, and whether employers will be asked to contribute to further funding beyond the levy payments is holding investment back. The first wave of ‘apprenticeship units’ are due to be funded via levy payments (potentially only in part) by April 2026: a mere five months away. We now expect operational information in early January 2026 on how the apprenticeship units will work as part of the levy.

The DWP/DfE are making it clear that levy funds are not entirely for employers to spend on apprenticeships and skills that they want: it will be more prescriptive than that. At the AELP Autumn Conference on 4 November, DWP said that they were aiming to be more transparent on levy usage and that it isn’t entirely the levy-paying employers to spend.

As well as encouraging the release of information earlier than January, we ask the government not to devalue the brand of apprenticeships (which have been described as ‘gold standard’) by using similar (and confusing) terminology for the flexibility to come through the levy.

Digital, AI, and priority sector focus

The government is committing significant investment to 'Techfirst' digital skills and AI learning, and is focusing funding on eight priority growth sectors through the Industrial Strategy, which include digital and technologies, and Gen AI. In our view, it rightly recognises that technical excellence and skills are at the core of economic growth. With Professional and Business Services and Financial Services forming a quarter of the growth areas of the Industrial Strategy, it’s essential that Skills England genuinely listens to the guidance from employers in those sectors, especially those looking to upskill their workforce. Government strategy should be shifting toward a more integrated, employer-led skills system, with Strategic Authorities taking a greater role in local coordination. Employers should aim to participate actively in consultations and local Employer Representative Boards, to ensure the voice (and needs) of employers of all sizes are heard by funding and policy decision makers and reflected in Local Skills Improvement Plans.

Building the 'missing middle': Higher-level skills (Levels 4-6)

The White Paper highlights a critical national challenge

The UK lags behind G7 peers in the proportion of adults holding qualifications at Level 4 or 5 – the 'missing middle' essential for an Industrial Strategy.

Employers should be aware that the government will intensify its promotion of the Lifelong Learning Entitlement as a way for individuals to gain qualifications at Levels 4 and above. Whether individuals will take out a Lifelong Learning Entitlement loan to fund their own higher-level skills remains to be seen, particularly when the cost of living crisis continues to bite.

Addressing the NEET crisis

At almost one million, the number of young people not in employment, education or training (NEET) is a shameful statistic for this country and its future. Kaplan is striving to provide opportunity for young people in its own employment, and the education and wraparound support which young people need to break into the job market.

It is welcome news for SMEs that the Autumn Budget seeks to encourage them to take on young apprentices. SMEs, who employ 80% of apprentices in this country, have yet to hear about any changes to incentives to encourage them to invest more in addressing the NEET crisis. We welcome initiatives within the White Paper. Kaplan is here to drive measurable improvements in skills and productivity. Here's to the tangible investment from the Treasury to make the words of the White Paper a reality.

How Kaplan contributes to addressing the issues

Kaplan is ready as a strategic partner in navigating the imperatives of the White Paper and Skills England’s Industrial Strategy. With 14 training centres across England and expertise in learning technology, Kaplan has the skills, capabilities, and infrastructure to provide businesses with the technical knowledge and skills so abundantly needed, be that on a national scale, for specific devolved priorities, for global organisations or SMEs.

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  ‘Apprenticeship units’ as the initial wave of ‘levy flexibility’

  We have already developed modular, digitally-enabled courses focused on data and technology skills, human-centric skills such as resilience, management and leadership, as well as financial services to enable employees to thrive at work.

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  Digital expertise

  Our strategy is explicitly focused on driving growth through strategic investment in digital products and expanding our Gen AI offering. We partner with employers to contextualise and customise short courses, which tackle critical skills shortages in areas like digital and AI.

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  Enhanced devolution

  Kaplan has a significant presence through our training centres across England, online classes for those who can’t travel and regional skills and employer networks to ensure the training we deliver is aligned with Local Skills Improvement Plans, Local Growth Plans and regional demands.

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  Provision at all levels, including 4-6

  Our commitment to the 'next generation of courses and personalised learning' in Accountancy and Tax, Financial Services and Data and Technology directly addresses the need for high-level, sector-specific expertise. Our new courses are designed to help the market navigate the technical knowledge and skills required for young professionals and career changers.

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  Supporting NEETs

  We have considerable experience and extensive teams to provide learners with individualised support and expertise in careers guidance, and have the highest rating from Ofsted for our learners’ personal development. We are perfectly positioned to give the guidance which young people need. We work with the Careers Enterprise Council to support schools and young people to make informed decisions.

When a new policy landscape is shaped, it can be challenging for employers to know which provision is credible. Employers need a partner they can trust to deliver high-quality learning which affects change, with consistently excellent service. We are focused on partnerships and service excellence. Our commitment is to provide transformative learning, tailored to sector needs, with first-class service standards. As the White Paper exhorts, we are ready to leverage our capabilities to create further successful partnerships.