New package of apprenticeship reforms announced

A newly announced package of reforms to the apprenticeships system seeks to reverse a recent decline in apprenticeship starts and rising unemployment among young people.

As announced in last month’s Budget, plans will see Government cover the full cost of apprenticeships for eligible young people under 25 at small and medium-sized businesses. Removal of the 5% co-investment rate for SMEs means that all training costs for eligible apprentices under 25 years-of-age will be fully funded in a bid to create more employment opportunities for younger workers.

In addition, new short courses in areas including AI, engineering and digital skills will also begin rolling out from April 2026 to give businesses greater flexibility to offer work-based training and upskill existing colleagues. New foundation apprenticeships will also open up in sectors such as hospitality and retail.

As part of the £725 million package of reforms, regional Mayors including in Greater Manchester will also benefit from a combined £140 million for a pilot to connect young people not in education, employment or training (NEET) with apprenticeship opportunities at local employers.

Changes are designed to tackle the sharp decline in apprenticeship starts among young people over the last decade: uptake has fallen by almost 40% since 2015/16, while youth unemployment has risen. The Government estimates around 50,000 more young people will be able to access apprenticeships as a result of the reforms.

Welcoming changes to how reforms will affect SMEs, Craig Beaumont, Executive Director at the Federation of Small Businesses, said:

“Small businesses are incredibly enthusiastic about apprenticeships, and we are pleased the Government is taking steps to make the system more small business friendly. It will help unlock more local roles, meaning small firms can do what they do best – taking people on and giving them a great chance in life.”