From 1st August, significant changes to apprenticeship funding have come into effect, reshaping how organisations of all sizes can invest in skills development.

For many employers, these updates raise important questions. What do the new rules actually mean in practice? How will funding work now? And how can businesses make the most of the increased support available?

Apprenticeship funding has often been associated with large, levy-paying organisations. However, the latest changes are designed to broaden access, reduce financial barriers and encourage greater investment in workforce capability across the board. This includes stronger incentives for employers to develop both new and existing employees, not just bring in new starters.

Whether you are a levy-paying organisation reviewing how to maximise your funds, or an SME exploring newly enhanced support options, understanding these changes is key. Done well, they present an opportunity to align skills development more closely with operational priorities, build capability from within and future-proof your workforce in a more cost-effective way.

Included in This Blog:

• Apprenticeship Levy and Co-Investment: What Is the Difference?
• Can Apprenticeship Levy Funding Be Used for Existing Employees?
• What Does Apprenticeship Funding Cover?
• Are There Additional Apprenticeship Grants or Incentives?
• How to Use Apprenticeship Funding to Upskill Your Workforce
• How to Identify Your Apprenticeship Training Needs
• How to Involve Line Managers in Apprenticeship Training
• How to Measure the Return on Apprenticeship Training
• How to Make Apprenticeship Funding Part of Your People Strategy
• Download the Apprenticeship Funding Guide

Download Our Apprenticeship Funding Guide 2026

The funding route you use will depend on factors such as your organisation size, the employee and the apprenticeship programme selected. Taking the time to understand these options will help you plan development more effectively, manage costs and make confident, informed decisions about your training investment.

As employers review the recent funding changes, a common question is whether apprenticeship funding can be used to develop existing employees, not just new hires. The answer is yes, and for many organisations, this is where the real opportunity lies.

Many businesses already have employees with valuable experience, organisational knowledge and the potential to take on greater responsibility. What they often need is a more structured development pathway to support progression into technical, specialist or leadership roles.

Apprenticeships provide this framework while enabling employees to apply their learning directly in the workplace. This creates a clear link between development and day-to-day operations, ensuring that learning delivers tangible business value.

In light of the updated funding support, including increased accessibility and reduced cost barriers in certain cases, investing in existing employees can be a more viable and attractive option than before. It allows employers to build capability from within while making more effective use of available funding.

Apprenticeship funding can contribute towards eligible training and assessment, but employers should also understand which costs remain their responsibility.

These may include the employee’s wages, management and mentoring support and any additional qualifications outside the apprenticeship standard.

Considering the full investment at the planning stage helps create a realistic and positive development plan. It allows managers to provide the right support and makes it easier to assess whether the programme is suitable for both the organisation and the individual.

The benefits of an apprenticeship can extend well beyond the funded training itself. Employees may gain greater confidence, take on new responsibilities and contribute fresh ideas to workplace projects and improvements.

Alongside the main apprenticeship funding arrangements, employers may be able to access further financial support or incentives.

The availability of this support can depend on factors such as the employee’s age, the size and funding status of the organisation, the employee’s personal circumstances, the apprenticeship standard selected and the programme start date.

The Apprenticeship Funding Guide provides further information about potential support and incentives. As eligibility can vary, it is helpful to check the current requirements for each programme rather than assume that every option will apply to every employee.

If you are unsure which support may be relevant, we can help you explore the options for your organisation.

Funding should not be the only factor influencing your decision. The most effective apprenticeship programmes are those that respond to genuine business and workforce needs.

Before selecting a programme, consider the skills your organisation needs now and in the future. These might include technical knowledge, operational leadership, business improvement, project management or people management.

It can be helpful to consider questions such as:

• Where do employees need additional technical knowledge?
• Which managers would benefit from formal leadership development?
• Where would stronger problem-solving capability support performance?
• Which processes would benefit from improvement expertise?
• Where does the organisation rely heavily on individual knowledge?
• Which employees could prepare for future progression?

For example, a manufacturing business might use an apprenticeship to develop an aspiring process leader. As part of the programme, the employee could apply their learning to performance management, problem-solving, team communication and workplace improvement.

This creates a clear connection between the apprenticeship and the organisation’s operational priorities, helping the employee develop while contributing to meaningful business outcomes.

Apprenticeship planning is often most effective when it forms part of your wider workforce strategy, rather than being introduced only when a capability gap becomes urgent.

A review of people and skills needs once or twice a year can help your organisation identify development priorities early. This might include upcoming succession risks, employees ready for progression, new machinery or technology, future leadership requirements, and areas where productivity or quality could improve.

You may also wish to consider the skills required to support continuous improvement, as well as employees who would benefit from a structured development pathway.

For organisations with levy funds, forward planning can include reviewing funds that may be approaching expiry and considering where they could support future capability. For SMEs, planning early provides more time to identify suitable employees, confirm eligibility and understand any potential employer contribution.

This approach can make the process feel more manageable and gives employees, managers and training providers more time to prepare for a successful programme.

An apprenticeship is more likely to deliver value when the employee’s line manager is involved from the outset.

Managers should have a clear understanding of what the employee will learn, how the learning relates to their role and what workplace support may be needed. They can also help identify projects and responsibilities that reinforce the apprenticeship programme.

When learning is connected to the employee’s day-to-day role, the organisation is better placed to benefit from new knowledge and ideas. The employee can also see how their development contributes to their own progression and the success of the wider team.

Completion and achievement are important measures of apprenticeship success, but they are not the only indicators of value.

Employers can also consider how the programme contributes to wider business performance. Depending on the apprenticeship, this could include improved productivity or quality, stronger management capability, increased employee confidence, internal progression and improvements generated through workplace projects.

Other benefits may include reduced process variation, more consistent use of problem-solving methods, greater retention of organisational knowledge and increased employee engagement.

Not every benefit will be immediately financial. Improved capability, stronger confidence and the retention of valuable knowledge can make a meaningful contribution over time.

Agreeing what success looks like at the beginning of the programme makes it easier to track progress and demonstrate the value of the investment to senior leaders.

Apprenticeship funding is more than a way to reduce the cost of training. Used strategically, it can help employers build capability from within, support employee progression and develop the skills needed for future performance.

Whether you are accessing support through the Growth and Skills Levy or co-investment, a positive starting point is to connect your funding decisions to your wider people and business strategy.

This means identifying current and future skills needs, reviewing the development potential of existing employees, choosing programmes linked to genuine business outcomes and involving line managers from the outset. It also means understanding the full investment and considering how success will be measured.

The earlier you connect apprenticeship planning with your business priorities, the more opportunity your organisation has to gain value from the training.

Would you like to understand how apprenticeship funding could support your upskilling plans?

Download our Apprenticeship Funding Guide for further information about:

• Growth and Skills Levy and co-investment routes.
• Eligibility requirements.
• Changes to apprenticeship funding.
• Employer contributions.
• Additional support and incentives.
• What apprenticeship funding can cover.
• Employer responsibilities.
• Setting up and using the Apprenticeship Service.

Whether you are considering an apprenticeship for an existing employee or reviewing your wider development strategy, the guide can help you explore your options with greater clarity.

If you would like support understanding your eligibility, potential contribution or the most suitable apprenticeship pathway, contact us today using the contact form below.

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