Apprenticeship Funding Band Reviews – What Providers Can Do To Prepare

Back in February I wrote an article about training provider preparation for the new system of apprenticeship assessment, well now providers need to prepare for funding band reviews!

On 22 June the Minister for Skills for the Department of Work and Pensions wrote to Skills England detailing expectations around funding band reviews, but please don’t be misled by the title, this is not just a letter about a review of the funding bands, is it also about what apprenticeships will and will not be funded and who for.

Here are 5 key areas that I have identified that I think providers should to consider when reviewing and planning for the future:

1, Examine national and your own provider’s achievement rates

The letter refers to the government wanting to see “further improvements in the quality of apprenticeship training provision, increasing the achievement rate to over 70%”. The quality of apprenticeship training and the achievement rates currently do not directly inform the funding band as they are determined by Skills England before an apprenticeship is approved for delivery. However, the letter is asking Skills England to advise DWP on which apprenticeship standards should be prioritised for a funding band review. This could mean that:

(a) apprenticeships with low achievement rates could be at risk of changes to funding bands, or even the removal of funding

(b) more of the funding could be held back and paid on completion (currently 20%). I know completion and achievement aren’t the same thing, but it could still be a consideration.

(c) funding could develop a link to the apprenticeship accountability framework because that is the mechanism used by the DfE to review the quality of apprenticeship training from providers. Arguably there could also be links to Ofsted.

(d) there is a greater risk of conflict of interest in assessment – in the new world of apprenticeship assessment providers may be able to deliver assessment. Could the pressures of the apprenticeship accountability framework and the drive to increase achievement rates risk assessment being weakened / made easier by providers?

To be fair, none of this, apart from the apprenticeship assessment bit, is new. The same request for IfATE to look at apprenticeships with too many learners dropping out without completion / low achievement rates was in a letter from Robert Halfon back in March 2024. However, if any of the apprenticeships you deliver have below 70% achievement rates, I would add it to your risk register in terms of future funding and capture what you are doing as a provider to improve them.  

2, Examine national learner volumes and progression routes

Do you offer apprenticeships that are niche and/or have low volumes nationally?

The letter states: “I want Skills England to identify where apprenticeships are best placed to meet the needs identified, taking into account demand, outcomes (such as achievement rates), and the value they add to existing training options, alongside affordability.”  

Such a statement leads me to consider whether the use of the word “demand” means that apprenticeships with low volumes could be at risk of changes to funding bands, reprioritisation of funding, or the removal of funding. I also wonder whether the use of the words “the value they add to existing training options” means that apprenticeships without clear progression routes or complementary links to other qualifications, as referenced in the occupational maps, could be at risk.  This has already been demonstrated with the announcement in March of the cessation of funding from Sept 2026 of 16 apprenticeship standards that Skills England believed did not support policy objectives or form a core part of career pathways.

3, Understand your learner and employer profile

What age are the apprentices and what size are the employers you work with?

There is a clear push for the re-prioritisation of funding for those age 16-24, and expansion of support for SMEs, for example:

• the new level 2 administrative assistant apprenticeship will be specifically for 16-24-year-olds;  
• additional financial support options have been introduced for employers taking on foundation apprentices (age 16-21);
• additional financial support options are being introduced for SMEs hiring apprentices aged 16-24.

These changes may impact the size, shape and scope of the demand for your apprenticeship offer.

In light of the priorities at the end of the letter, I suspect more standards, particularly at level 2 and below will start to be  prioritised for funding for those aged 16-24 :“Make a strong contribution to supporting our objectives on young people, with a focus on apprenticeships that deliver, or can deliver, a high proportion of starts for those aged under 25”.  I have also noticed that when the Skills Minister refers to potential funding uplifts it does so in the context of those aged 16-24: “I am therefore commissioning Skills England to provide advice to DWP to identify which standards should be brought forward as a priority for a funding band review and potential funding uplift in order to boost starts for young people.”

4, Understand your apprenticeship offer

a) Does your apprenticeship offer map to the Industrial Strategy?

The letter says “We want to continue to introduce greater flexibility to meet employer’s skills needs, support the Industrial Strategy and power economic growth”, and “to ensure we are delivering more opportunities for young people as well as the skills the country needs”.   This could mean that apprenticeships that do not support the industrial strategy are at risk of changes to funding bands, reprioritisation of funding, or the removal of funding. The industrial strategy highlights the priority sectors of Advanced manufacturing, Clean energy industries, Construction, Creative industries, Defence, Digital & technologies, Financial services, Health & adult social care, Life sciences, Professional & business services.

b) Does your apprenticeship offer focus on new or existing employees?

For those already employed (existing workforce), apprenticeship units are seen as critical: “it’s vital we set aside funding to upskill the existing workforce”. Whereas for apprenticeships, the focus appears to be shifting to young people and new employees (refer to point 3).

c) Does your apprenticeship offer focus on entry or higher level apprenticeships?

It is clear that the direction of travel is to focus on entry level apprenticeships (foundation up to level 2): “we want to increase the number of entry level apprenticeships to give more people a foot in the door in their careers”. This could mean that apprenticeships at level 3/4 and above are at a greater risk of changes to funding bands, reprioritisation of funding, or the removal of funding.

5, Explore diversification

As a provider have you engaged with the new apprenticeships units? 

The letter states “it’s vital we set aside funding to upskill the existing workforce”, and states they have “introduced the first fully funded short courses, apprenticeship units, to support employers to rapidly upskill their workforces”. It also states that Skills England is identifying further opportunities. It goes on to say that Skills England are “leading the work with industry to identify further high-impact growth opportunities”

This could introduce opportunities for providers to diversity or expand into the apprenticeship unit marketplace. An indication of what may be developed in the future can be found in the Skills England Annual Skills Report and Sectoral Skills Needs Assessments.

On a final note, there is a clear indication of the need to see things happening quickly, for example, “[apprenticeship units] I am keen to roll these out as swiftly as possible”, and the minister has asked Skills England to provide advice on which standards should be brought forward as a priority for a funding band review by July and the advice on the potential funding rates by October. So as a provider, as always, prepare for change where you can.

By Jacqui Molkenthin from JEML Consulting