Skills funding reforms: what’s changed and why it matters

As the Apprenticeship Levy gives way to the Growth and Skills Levy, the Government is transforming how workplace learning is funded and taught. The reforms announced last month mark a new chapter for career development, with a stronger focus on young people, priority skills and flexible learning

The reforms are intended to boost the education and employment options available for those at the start of their careers. Foundation apprenticeships - entry-level, paid Level 2 roles designed as a "stepping stone" to more advanced apprenticeships - are being positioned as a key route for eligible 16 to 24-year-olds. The aim is to give young people the chance to earn while they learn and build a pathway into employment.

New short-course options, or apprenticeship units, are also being introduced from April, allowing employers to upskill staff more quickly in targeted areas. Units will be restricted to employed learners aged 19 or older and involve 30 to 140 hours of training, delivered over one to 16 weeks.

For both learners and employers, that should mean more choice: standard apprenticeships for deeper occupational development, alongside shorter funded courses where focused skills-building is the priority.

The reforms also reflect the rapid pace of new technologies. A Level 4 AI and Automation Practitioner apprenticeship was launched in December, and the first wave of apprenticeship units includes a Level AI leadership – Developing AI strategy – Apprenticeship unit . These targeted courses signal a stronger government focus on digital capability, productivity and future-facing skills.

Investment in AI and digital brings not only major opportunities for innovation, productivity and growth, but also important strategic questions for leaders around ethics, workforce capability, decision-making and long-term business resilience.

At Henley, we understand that AI advances and human leadership skills go hand-in-hand. That’s why our work brings together expertise in digital and AI with more than 80 years of experience in leadership, business strategy and organisational transformation.

Funding is also being withdrawn from some Level 6 leadership and management apprenticeship standards from September 2026. For many experienced professionals, that means advanced development is likely to continue through employer sponsorship or commercial routes rather than Levy-funded provision.

We remain committed to supporting the development of confident, capable managers and leaders at every stage of their career. That includes continuing to offer programmes at Levels 6 and 7, even where Levy funding is no longer available, and helping employers to identify which apprenticeships, funded short courses and commercial options best meet their business priorities.

The announced changes are a timely reminder that while funding models may evolve, the need for high-quality leadership, management and critical thinking skills remains constant. In a changing policy landscape, our focus remains the same: supporting learners to unlock their potential and helping organisations to build a pipeline of sustainable talent.

“Henley Business School has been developing managers through periods of profound change since the years following the Second World War. Preparing leaders to navigate shifts in the business landscape is part of Henley’s DNA, and that history gives us a valuable perspective at moments like this. As AI transforms industries and sectors at pace, the need for ethical leadership, sound judgement and critical thinking has never been greater.

“These reforms create exciting new opportunities, particularly for younger learners and for organisations looking to build digital and AI capability more flexibly. At the same time, the need for thoughtful, responsible leadership development does not disappear when funding rules change. Our commitment is to supporting learners at every stage of their career journey - from first steps to lasting impact.”

Professor Anne Dibley, Head of Post-Experience and Apprenticeship Programmes