Government sets out £725m apprenticeship reforms

The government has announced a £725m package of apprenticeship reforms intended to expand training routes for young people and address rising youth unemployment over the next three years.

Under the plans, ministers expect about 50,000 young people to benefit from new apprenticeship and training opportunities.

The programme includes a £140m pilot allowing regional mayors to link local employers with young people, particularly those not in education, employment or training. Officials said the aim is to match skills provision with local labour needs.

The government will also meet the full cost of apprenticeships for eligible people under-25 at small and medium-sized businesses. Scrapping the 5% co-investment requirement is intended to ease costs for firms and widen access for young applicants.

Businesses are set to gain further flexibility through short courses in areas such as artificial intelligence, engineering and digital skills from April 2026. Ministers said these courses will sit alongside work with the defence sector on new training options to help employers develop specialist capabilities.

The reforms include plans to expand foundation apprenticeships in sectors including hospitality and retail. Officials said the measures are designed to modernise the system and make it more responsive to employers and learners.

A new Level 4 apprenticeship in artificial intelligence is due to be introduced from April 2026, forming part of wider changes to the Growth and Skills Levy.

According to the government, the levy reforms support the prime minister’s ambition for two-thirds of young people to move into higher-level learning, whether academic or technical, as part of efforts to strengthen early-career pathways.

Prime minister Keir Starmer said: “For too long, success has been measured by how many young people go to university. That narrow view has held back opportunity and created barriers we need to break.

“If you choose an apprenticeship, you should have the same respect and opportunity as everyone else. That’s why the Government is investing £1.5bn through the Youth Guarantee and the Growth and Skills Levy – creating 50,000 more apprenticeships and foundation apprenticeships for young people over the next three years.”

Pat McFadden, Work and Pensions secretary, added: “Every young person deserves a fair chance to succeed. When given the right support and opportunities, they will grasp them. That’s why we are introducing a range of reforms to help young people take that vital step into the workplace or training and to go on and make something of their lives.

“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.”