Skills England Changes how it Recommends Funding for Apprenticeships

Skills England is changing how it recommends funding for apprenticeships, dropping the quote-based model it has used since 2022 for a data-led interim approach.

Guidance published on 25 June confirms an interim model that will run until later in 2026. Instead of asking occupational groups to supply quotes from assessment organisations, Skills England will use actual assessment cost data, weighed against its own evidence base and ONS figures. Employers may still be consulted where appropriate, and occupational groups can still be asked for advice and on-programme costings, but they are no longer the starting point.

The agency said the old model had served the sector well but that it needs faster, more consistent decisions across all skills products, apprenticeships, foundation apprenticeships and apprenticeship units. A fuller methodology will be modelled and tested over the summer, with detail to follow later in the year.

The guidance also gives Skills England’s Expert Network, the panel of volunteer sector experts announced in March, a role in funding. The agency may ask members for their views before making a recommendation.

Little else changes. Bands are still set by the Secretary of State for Work and Pensions, on a recommendation from Skills England that is weighed against impact and affordability. Apprenticeships still sit in one of 30 bands from £1,500 to £27,000, now under the Growth and Skills Levy.

The change comes days after skills minister Jacqui Smith told Skills England to identify, as an immediate priority, which standards should be first for funding uplifts, a response to long-running complaints that bands have not kept pace with inflation and delivery costs. Smith wants advice on standards by July and on rates by October, overlapping with the summer testing of the new methodology.

On revisions, the guidance says funding may be reopened once a product is in delivery if there is a significant change to duration, level, content or entry requirements, a mandatory qualification is added or removed, or the product is split or merged. Revised funding could go down, stay the same, or go up.