Foundation apprenticeships will soon be opened up to sectors like hospitality and retail, the government has confirmed.
Last month’s budget announced an extra £725 million investment into the apprenticeships system over the next three years.
The Department for Work and Pensions has now provided more detail on what that cash will fund, claiming that around 50,000 additional apprenticeship opportunities will be created.
Here’s what we know so far…
More foundation apprenticeships
The first seven foundation apprenticeships, which are level 2 apprenticeships lasting eight months designed to be a stepping stone to higher apprenticeships, were launched this autumn in the construction sector, digital, engineering and manufacturing and health and social care.
Ministers previously came under fire for excluding high-demand industries from the offer.
The DWP has now confirmed it has “plans to open up new waves of foundation apprenticeships in sectors such as hospitality and retail”.
Details are however sparse. It is not yet known specifically how many more foundation apprenticeships will be created, the full range of sectors, and from when.
£140m NEET pilot
The £725 million cash injection also includes £140 million for a pilot where “mayors will be able to connect young people – especially those not in education, employment or training (NEET) with thousands of apprenticeship opportunities at local employers”.
Details are again light but the DWP added: “By partnering with regional leaders who best understand their local economies, these pilots will ensure young people can access training that meets the needs of employers in their area.”
Free apprenticeships for under 25s in SMEs
As announced by the chancellor last month, part of the £725 million will also fully fund apprenticeships for under 25s in small and medium-sized businesses.
Since the apprenticeship levy was introduced in 2017, only large employers with a payroll in excess of £3 million pay into the levy at a rate of 0.5 per cent of salary costs.
The contributions go towards funding all parts of the apprenticeship system, including 95 per cent of training of apprentices in non-levy paying businesses. SMEs then make a co-investment payment of 5 per cent.
In 2024, the Conservatives scrapped the 5 per cent co-investment payment for SMEs when they hire an apprentice under the age of 22.
This government is now extending this co-investment relief to those aged 22 to 24 from the 2026-27 academic year.
Growth and skills levy courses
From April 2026, the apprenticeship levy will be turned into a “growth and skills levy” where it will be able to fund a range of non-apprenticeship courses.
The courses will be called apprenticeship “units” and could last just a week.
Today’s announcement confirmed businesses will “benefit from a major boost in flexibility as new short courses in cutting-edge areas including AI, engineering and digital skills will begin rolling out from April 2026”.
“This includes working closely with the defence sector to develop a new suite of flexible, work-based training options to help employers upskill their existing workforce in the critical skills needed for future success.”
It is not yet known when the government will release the list of apprenticeship units that will be funded from April.
‘This funding is a downpayment on young people’s futures’
The reforms are designed to tackle the decline in apprenticeship starts among young people over the last decade – which have fallen by almost 40 per cent since 2015-16.
On Saturday the government also announced more details about how the promised “youth guarantee” will create 350,000 “training or workplace opportunities” and 55,000 subsidised jobs to tackle high levels of young people who are NEET.
DWP said over the coming months it will work “intensively” with its agency Skills England and business on the “right balance to further boost apprenticeship starts for young people while delivering the right flexibilities for business”.
Skills England will also drive forward a “renewed Skills Inward Investment and Infrastructure offer for business, co-created with the Office for Investment”. This will involve “meeting investors to guide them through the UK skills system and potential funding streams to get training for jobs off the ground as quickly as possible and support young people in their careers”.
Prime minister Sir Keir Starmer said: “It’s time to change the way apprenticeships are viewed and to put them on an equal footing with university. This is a defining cause for this government and a key step towards our ambition to get two-thirds of young people in higher-level learning or apprenticeships.”
Work and pensions secretary Pat McFadden (pictured) added: “This funding is a downpayment on young people’s futures and the future of the country, creating real pathways into good jobs and providing work experience, skills training and guaranteed employment.”
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