The long-standing Apprenticeship Levy is officially being replaced by the Growth and Skills Levy. Driven by a clear government initiative to tackle youth unemployment and expand pathways into meaningful work, the new framework fundamentally reshapes how training funds are distributed across England's workforce.

Employer Incentives

At the heart of the Growth and Skills Levy is a renewed commitment to early-career pathways. The Department for Education (DfE) has introduced a targeted package of financial incentives to make recruiting young people into the education sector more accessible and cost-effective:

• All employers:

  • The DfE have introduced a cash incentive of up to £3,000 for hiring an apprentice aged 16-24 that has been on Universal Credit for 6 months 

• Non-levy paying employers (smaller schools and settings):
  • Can receive a £2,000 incentive for recruiting new apprentices aged 16–24, starting October 2026, payable after 90 days of employment. 
  • The government is doubling down on support for young talent by removing co-investment costs entirely (0%) for apprentices aged 16 to 24. For adult learners aged 25 and over, the co-investment rate remains at 5%.

Changes to the levy

For Levy-Paying Employers (payroll over £3m):

• The traditional 10% government top-up ends on 31 July 2026. With less funding available, levy-paying employers will have to focus on prioritising quality apprenticeship programmes over quality
• Unspent funds will now expire after 12 months rather than 24
• Employers exceeding their funds will now contribute 25% of the overspend (previously 5%)​

Next Steps with Best Practice Network

As these changes take effect, proactive planning is essential to ensure your school or trust maximises available funding without losing unspent balances.

As an award winning apprenticeship provider, Best Practice Network delivers a wide suite of tailored education apprenticeships to help schools and early years settings maximise their training budget and tackle workforce shortages. 

Find out more about the apprenticeships we offer:
View our Apprenticeships