Apprenticeship subcontracting review launched by DWP

A “full review” of apprenticeship subcontracting rules and policy is set to run over the coming months, the government has said.

The Department for Work and Pensions confirmed the move in version one of the apprenticeship funding rules for 2026-27 published today.

It said: “We will undertake a full review of the subcontracting section in July – August 2026.

“This will include a review of the underpinning policy, the rules and evidence requirements and the associated definitions. We will involve sector representative bodies in this review and aim to conclude the review by September 2026.”

Changes will come into effect from 2027 and further details of the scope of the review will be “made available in due course”.

The announcement follows comments made by DWP’s head of funding delivery Tracey Cox at this year’s Apprenticeship and Training Conference, who said officials were looking to update their definitions after finding some providers were failing to declare subcontracting because they were unsure what counts.

In March, Cox said there were around six cases where auditors proposed to clawback all funding handed to providers because rules were misinterpreted.

Under the new rules, DWP said it was “reviewing the definition of a subcontractor to make it clearer who is and who is not a subcontractor and what we mean by directly managed and controlled”.

The intended new definitions have already been included in the funding rules glossary, with any resulting changes likely to take effect from January 1, 2027.

De-minimis row back

The DWP had proposed introducing a £25,000 “de-minimis” threshold for organisations to be a subcontractor where they are not on the official apprenticeship provider and assessment register.

This has now been dropped and the existing £100,000 threshold will continue to be used.

However, there is also an amendment to the existing de-minimis to remove the stipulation that this can only be used by providers who have achieved the subcontracting standard. This exemption can now be used by all providers for delivery from 1 August 2026.

Min wage withdrawals and ‘substantial’ job link

Elsewhere in version one of the 2026-27 funding rules is an update that if a provider is made aware that a learner is not being paid in line with the national minimum wage regulations, the learner must be withdrawn from the programme.

A clarification has also been added to state that the outcome of an apprentice’s initial assessment must show a “clear and substantial” link between the job role and the apprenticeship, with the apprenticeship “leading to full occupational competence for that role”.

The draft rules said the provider must agree with the employer “that the individual’s job role has a productive purpose and there is a direct link between the selected apprenticeship standard and the individual’s job role”.

This paragraph has now been strengthened to say the provider must agree with the employer “that the individual’s job role has a productive purpose and there is a clear and substantial link between the selected apprenticeship standard and the individual’s primary day‐to‐day occupational duties and purpose, such that the apprenticeship will lead to full occupational competence relevant to that role”.