What's Happening?
The UK government is set to implement significant reforms to its apprenticeship system in 2026, with a focus on increasing opportunities for young people. A £140 million pilot program will enable mayors to connect young people with apprenticeship opportunities, particularly targeting those not in education, employment, or training (NEETs). The reforms include the removal of the 5% co-investment rate for SMEs hiring eligible young people under 25, and the introduction of 'apprenticeship units' funded through the Growth and Skills Levy. These units are designed to quickly address skills gaps in key areas such as AI and digital skills. The government will continue to fund Level 7 apprenticeships for young people, but funding for those aged 22 and over will be
limited under the new levy system.
Why It's Important?
These reforms are poised to significantly impact the UK's workforce development, particularly in addressing youth unemployment and skills shortages. By reducing financial barriers for SMEs and introducing targeted training units, the government aims to strengthen early career pipelines and enhance workforce capabilities. For HR leaders, these changes present an opportunity to align with local authorities and regional partners to tap into motivated young talent. The reforms also position HR as a strategic advisor in workforce planning and skills investment, potentially leading to long-term organizational resilience and competitiveness.
