The Level 7 apprenticeship has been a game changer for small accounting practices. It provides a way to offer development opportunities for young people and existing colleagues to become full professionals. However, this route may not be widely available for much longer.
Skills England and the Department for Education are expected to announce (in late February 2025) that funding for a significant number of Level 7 apprenticeships will be removed in the summer of 2025. Consequently, this could shut the door on affordable routes to gaining the knowledge and skills needed to be a professional accountant through qualifications such as ICAEW, ACCA, and CIMA.
These changes could happen from as early as 1 August 2025.
How have Level 7 apprenticeships helped employers?
From small to medium sized businesses to larger corporations, Level 7 apprenticeships are essential development programmes to enhance the workforce’s capabilities with advanced knowledge and skills.
Currently, businesses can utilise government funding to subsidise training costs when investing in Level 7 apprenticeships. This makes it a more cost-effective method to upskill new and existing talent.
Why this matters to small accounting practices
Non-levy payers
Currently, small firms can develop talent under the age of 21, or those aged 22-24 with an Education, Health and Care Plan (EHCP), free of charge with the knowledge, skills, and behaviours needed to be a professional accountant. For those 21 and over, small firms would contribute 5% of the costs.
Ultimately, this allows firms to invest in talent without budgetary constraints.
Levy payers
Organisations paying into the levy (those with a paybill over £3m a year) can use their levy funds to develop talent in areas such as accounting, data and technology.
Removing Level 7 apprenticeship routes is a threat to business growth and social mobility
Through conversations with our clients at Kaplan, we are very aware that the potential Level 7 apprenticeship funding changes can severely affect businesses’ ability to upskill their workforce affordably.
As well as funding concerns, Level 7 apprentices under 25 were previously exempt from National Insurance contributions. However, new employees are being subjected to the now-increasing NICs.
Removing Level 7 funding will also impact social mobility. Many young people or career changes rely on apprenticeships to enter the profession without the challenges of getting into debt for qualifications or shouldering university student loans.
What should businesses do now?
If your firm was planning to grow your talent and address retention challenges after August 2025, act sooner. You will need to bring these plans forward as the option may no longer exist afterwards.
Next steps:
- Recruit earlier
Start the hiring process as soon as possible so that your new apprentice is formally enrolled before funding changes take effect.
- Consider conditional offers
If you typically wait until after A Level results day (14th August this year) before making apprenticeship offers, consider making conditional offers instead - subject to a later review of A Level results or basing your offers on GCSE grades.
- Lead professional development discussions with Level 3 and 4 apprentices
If you have apprentices coming towards the end of a lower level apprenticeship, don’t wait until September to enrol them onto a Level 7 programme. It’s unlikely to be available to them after 1st August 2025.
Note: they must complete their current apprenticeship in good time to be enrolled on a Level 7 programme before 1st August 2025.
- Reassure any current Level 7 apprentices
Anyone who has started a Level 7 apprenticeship programme before 1st August 2025 should continue to have their funding met for the duration of their apprenticeship.
- Spread the word
Share this information with peers and colleagues in the industry who may be unaware that this development route is likely to be removed.
Get expert guidance
In this time of funding uncertainty, connect with our experts who can guide you through funding changes relating to Level 7 and soon the Government’s introduction of a new Growth and Skills Levy, instead of the Apprenticeship Levy.
From selecting the right apprenticeship programme to navigating the hiring process, you can find tailored advice, training, and ongoing support.