Leadership and management apprenticeships are on the chopping block under plans to find savings and tilt the apprenticeship system towards young people, Jacqui Smith has confirmed.
The skills minister told FE Week the popular programmes, along with other unnamed “higher level” standards, are “not only not what people would traditionally think of as apprenticeships, but also things that people traditionally have thought of as employers funding [themselves]”.
“So yes, that will be one of the areas,” she confirmed when asked whether leadership and management apprenticeships were up for defunding consideration.
Smith added the government would have “more to say about which of those apprenticeship standards we think aren’t appropriate for public funding” but did not commit to a timeframe or scale of impact.
Leaders have warned that removing public funding from leadership and management apprenticeships would be a “disorientating shock” for many employers who have “never been told that levy funding is not theirs to use as they see fit”.
Value for money
Employer anxiety has grown over potential cuts to management courses and industry progression routes amid mounting apprenticeship budget pressure in recent months.
A “streamlining” review was signalled by chancellor Rachel Reeves in November’s budget, when she reiterated that the government would refocus apprenticeships on young people and simplify the system to ensure better value for money.
Ministers are concerned about spiralling numbers of expensive higher-level apprenticeships being taken up by older workers, while starts at lower levels and among young people have crashed.
Apprenticeship starts at level 2 have plummeted almost 60 per cent from 161,390 in 2017-18, the year the apprenticeship levy was introduced, to 65,680 in 2024-25, while starts at level 3 shrunk 12 per cent from 166,220 to 147,090 over the same period.
Meanwhile, starts at level 4 and above, which are more costly to deliver, rocketed 192 per cent from 48,150 to 140,730.
FE Week understands that officials are scrutinising apprenticeships that resemble continuing professional development instead of discrete occupations, and are mostly taken by older workers.
Management standards are the most popular in terms of starts across most apprenticeship levels.
FE Week analysis of the government’s latest full-year data shows that at level 5, the operations manager apprenticeship recorded the most enrolments in each of the past three years, hitting triple the number of starts as the next most popular (leader in adult care) in 2024-25.
The chartered manager degree apprenticeship was the most popular at level 6, the senior leader programme was the most prolific at level 7, and at level 3 the team leader standard was consistently the second most popular.
Most starts on these standards are from people aged 25 and older.
The total number of people aged 24 or younger starting an apprenticeship fell by 22 per cent, from 220,280 in 2017-18 to 172,240 in 2024-25.
Starts for people aged 25 and older have shot up by 17 per cent from 155,480 to 181,270 over the same period.
During an interview with The Times last month, former Labour cabinet minister Alan Milburn, who is leading a review into the rise in young people who are not in education, employment or training (NEET), said it was a “crazy” fact that a significant number of them go to people over the age of 40.
“Ask any member of the public what they think an apprenticeship is,” Milburn said. “It’s an entry opportunity for young people, not in-work training for older people.
“So we’ve got to look at all of these things and we’ve got to look at where we’re spending public money.”
Traditionally speaking
The government has already moved level 7 apprenticeships out of public funding for people aged 22 and older.
FE Week asked skills minister Jacqui Smith what else was in the firing line in terms of the government’s streamlining efforts during an interview for National Apprenticeship Week at a site visit to Kier Group (pictured above) this week.
She said officials were looking “very carefully at areas that don’t have many starts” before confirming that management apprenticeships were under real threat of defunding.
“We’re working with employers, and we’ll have more to say about which of those apprenticeship standards we think aren’t appropriate for, essentially, public funding,” she said.
Asked directly whether she was referring to management apprenticeships, the minister replied: “I think there are elements in some of the higher-level apprenticeships, some of the areas of leadership and management, where not only are these not what people would traditionally think of as apprenticeships, but there are also things that people traditionally have thought of as employers funding [themselves]. So yes, that will be one of the areas.”
While the government is engaged in a streamlining effort, officials are also set to bring on board new short courses to be funded through the levy from April. Smith told FE Week, however, that the initial offer would be “tight” (click here to read full story).
That’s Asda price
Defunding of popular management apprenticeships is expected to cause outrage among employers.
The Chartered Management Institute (CMI) launched a petition last month to show the removal of management apprenticeships would undermine productivity in industrial strategy sectors, as well as other critical areas such as retail and hospitality.
It has around 5,000 signatures so far, including testimonies from big-name employers such as Amazon, BAE Systems, Heathrow, Barnardo’s, John Lewis, Kier Group, Lloyds Bank and Marie Curie.
James Goodman, supermarket giant Asda’s chief people officer, said: “Reports that the government plan to defund leadership apprenticeships would clearly be a further backward step, that would cut off proven progression routes and weaken the sector’s ability to develop future leaders.”
Matthew Percival, future of work and skills director at the CBI, said businesses were “deeply disappointed that ‘how can we unlock business investment in skills’ has been replaced with ‘where is the least damaging place to cut’”.
“With each new announcement, the levy looks more like a tax and less like a ‘use it or lose it’ incentive to invest in training,” he added.
Every little helps
The levy is generating more cash contributions than expected and is estimated to raise £4.4 billion this financial year.
England’s apprenticeship budget for 2025-26 has received an in-year top-up worth £43.2 million, bringing it up to a record £3.118 billion. Deducting the £500 million paid to the devolved nations, it means the top slice the Treasury takes between how much the levy generates and how much is dished out for apprenticeship spending hits around £780 million.
Percival said: “It [the levy] takes more money out of employers’ training budgets than it adds to government-directed programmes, reducing total investment in training. Turning this around starts with transparency about where levy receipts go, not only how the skills budget for England is spent.”
Ben Rowland, chief executive of the Association of Employment and Learning Providers, added: “Removing public funding from leadership and management apprenticeships would be a disorientating shock for many employers who have never been told that levy funding is not theirs to use as they see fit.
“Not only are these skills vital for productivity and growth, they are vital if these employers are going to be in a position to take on NEETs into their workforces. Government has to pause and rethink these proposals from a whole system perspective.”
Sources told FE Week that government officials could link the streamlining efforts to new apprenticeship units, in some cases turning full apprenticeships into fundable shorter courses.
The British Chambers of Commerce (BCC) said the threat of restrictions to management apprenticeships was “damaging business confidence and would be counterproductive to growth”.
“It is vital that apprenticeship units deliver the promised flexibility and help to address the training gaps created by the removal of level 7 provision or defunding of management and leadership training at any level,” a BCC spokesperson said.
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