The Autumn Budget on 26 November sets a clear direction of travel for apprenticeships and employer-funded skills. For employers who pay the apprenticeship levy, a suite of reforms is expected to take effect from 2026, reshaping how levy funds can be used. While final implementation dates are still to be confirmed, the changes are intended to sit alongside new opportunities to spend levy more flexibly on high-impact training, including the upcoming “apprenticeship units”.
Here’s what’s changing, why it matters and how employers can get ahead.
1. Levy funding
Three key headline adjustments:
- The levy top-up: Previously, levy contributions received a 10% government uplift in digital accounts: this will no longer be provided.
- Funds expiring window. Employers will now have a 12 month window to draw down new levy contributions once they enter the account, where this was previously 24 months.
- Co-investment changes once Levy funds run out. Once all available levy funds have been spent, the co-investment rate has changed, with the government covering 75% of the remaining training costs, a decrease from the current 95%. The employer will contribute the remaining 25%, up from 5%.
What this means: large employers will need tighter workforce planning around levy drawdown, and may want to prioritise programmes that deliver measurable skills impact quickly.
2. Non-levy payers get stronger incentives to support the Youth Guarantee
The Budget confirmed that SME (non-levy) employers will get fully-funded apprenticeship training and assessment for eligible employees aged under 25 (up from under 22).
What this means: SMEs hiring or upskilling early-years career staff can now access apprenticeships with significantly reduced cash burden. For larger employers, it signals a broader push to re-focus apprenticeship funding on younger workers.
3. New opportunities: Apprenticeship Units from April 2026
Crucially, these reforms are paired with a major flexibility unlock: from April 2026, levy funds can be used on short, modular training courses called Apprenticeship Units, starting in critical skills areas such as AI, digital and engineering.
Apprenticeship Units are “elements” from existing standards. They are shorter than full apprenticeships, and let employers target specific skill gaps rapidly, ideal for fast-moving domains like AI and data.
What this means: levy-paying employers will soon be able to invest in bite-sized, high-value training without committing to a 12–18 month programme. This is especially relevant for organisations needing to upskill experienced staff quickly for AI adoption, automation, and digital transformation.
How employers should respond now
- Audit your levy balance and expiry profile.
With a 12-month expiry window, visibility of what’s landing and when it lapses becomes mission-critical. You might need to consider accelerating existing Levy utilisation plans to avoid losing the opportunity. - Prioritise high-impact pathways that can flex into units later.
Choose training partners who align programmes to standards and can modularise delivery as units go live. - Prepare line managers for faster upskilling cycles.
Units mean more frequent, shorter training interventions. Build time and support into operating rhythms now.
Where Cambridge Spark fits
Cambridge Spark is already delivering outcome-based AI and data apprenticeships aligned to national standards. That means we’re ready to support employers as the Growth & Skills Levy shifts toward modularity. We can help you:
- Deploy targeted AI and data upskilling quickly through standard-aligned modules.
- Create pathways from short units into full apprenticeship qualifications.
- Plan your levy strategy so funds are spent before expiry and tied to real transformation goals.
The Budget signals a tighter focus on encouraging employers to utilise their Levy. Organisations that treat this moment as a chance to refocus on high-value, fast-moving capabilities, especially in AI and data, will be best placed to thrive as Apprenticeship Units arrive in 2026.
If you’d like to explore how modular AI and data training could work for your workforce, get in touch with the Cambridge Spark team.
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