50,000 more young people to benefit from apprenticeships as Government unveils new skills reforms to get Britain working

The £725 million package of reforms to the apprenticeship system will help to tackle youth unemployment and drive economic growth, with thousands more young people expected to benefit over the next three years.

The latest funding includes a £140 million for a pilot where Mayors will be able to connect young people - especially those not in education, employment or training (NEET) with thousands of apprenticeship opportunities at local employers.

By partnering with regional leaders who best understand their local economies, these pilots will ensure young people can access training that meets the needs of employers in their area.

As part of the package, the government will also cover the full cost of apprenticeships for eligible young people under 25 at small and medium-sized businesses.

Removing the 5% co-investment rate for SME’s means that the training costs for all eligible under 25 apprentices are fully funded opening up thousands of opportunities for young people. This will make it easier for young people to find opportunities and remove the burden from businesses, making it easier for them to take on young talent.

Businesses will also benefit from a major boost in flexibility as new short courses in cutting-edge areas including AI, engineering and digital skills will begin rolling out from April 2026.

This includes working closely with the defence sector to develop a new suite of flexible, work-based training options to help employers upskill their existing workforce in the critical skills needed for future success.

Today’s announcement comes alongside plans to open up new waves of foundation apprenticeships in sectors such as hospitality and retail.

The reforms will simplify and modernise the apprenticeship system, making it more efficient and responsive to the needs of employers and learners. From April 2026, short courses will be introduced to provide more flexible training options and a new Level 4 apprenticeship in AI will also be introduced, supporting employers to develop the skills of their workforce.

The reforms to the Growth and Skills Levy build on the Prime Minister’s ambition for two-thirds of young people to participate in higher level learners – academic, technical or apprenticeships - helping more young people gain the skills they need to start their careers.

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 £1.5 billion 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.

It’s time to change the way apprenticeships are viewed and to put them on an equal footing with university. This is a defining cause for this government and a key step towards our ambition to get two-thirds of young people in higher-level learning or apprenticeships.

Work and Pensions Secretary Pat McFadden said:

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.

The reforms are designed to tackle the sharp decline in apprenticeship starts among young people over the last decade – which have fallen by almost 40% since 2015/16 and shift the focus towards supporting young people into high-quality training and employment.

This latest intervention follows an £820 million investment guaranteeing every young person the chance to gain the skills they need for success and support to find a job. This package will create 300,000 more opportunities to earn and learn and provide guaranteed jobs to almost 55,000 young people.

Over the coming months, DWP and Skills England will work intensively with business on the right balance to further boost apprenticeship starts for young people while delivering the right flexibilities for business.

Skills England will drive forward, with the Office for Investment, the service to support major investors and help them navigate the skills system. It will also establish a new skills infrastructure development service to support businesses to get training for jobs off the ground as quickly as possible and support young people in their careers.

McLaren Automotive Chief Executive Officer Nick Collins said:

Apprenticeships are a critical pipeline for developing the next generation of talent. They provide an immersive pathway for young people to gain practical experience and learn in real world environments.

At McLaren we recognise the importance of investing in people and skills to create the world’s most extraordinary supercars. We are proud to inspire and equip the next generation to continue this tradition of excellence.

Craig Beaumont, Executive Director at the Federation of Small Businesses, said:

Small businesses are incredibly enthusiastic about apprenticeships, and we are pleased the Government is taking steps to make the system more small business friendly. It will help unlock more local roles, meaning small firms can do what they do best – taking people on and giving them a great chance in life.

Rt Hon Robert Halfon, Executive Director, Make UK, said:

Manufacturers support the Government’s commitment to a more flexible Growth and Skills Levy to boost investment in high-quality training. The development of foundation apprenticeships has been a positive step in ensuring that effective entry level routes into employment are there for young people.

Industry is also keen to work with mayoral authorities to recruit more young people into engineering and manufacturing apprenticeships. Enabling more businesses to invest in work-based training is critical to supporting more young people into skilled work, and mayoral authorities bringing together employers and young people will help this to happen.

Chris Perriton, Head of Learning Pathways, Marston said:

At Marston’s, we believe apprenticeships are a vital pathway for young people to build confidence, gain practical skills and unlock long-term careers in hospitality. We welcome the Government’s commitment to expanding opportunities and driving skills development, and we’re proud to play our part by offering high-quality apprenticeships across our pubs and support teams. These programmes not only provide hands-on experience but also the structured training and mentoring needed to help the next generation thrive in our industry.

Dan Clarkson, Chief Operating Officer, Lee Marley Group said:

Apprenticeships play a vital role in sustaining the strength and capability of the construction industry. They give young people the structured development and real-world experience they need to carry essential craft skills forward, while building the confidence to pursue long-term, rewarding careers.

As construction continues to evolve, apprenticeships help address skills shortages and uphold the high standards our built environment depends on. Supporting future talent is a responsibility we take seriously, and it remains central to everything we do at Lee Marley Group.

Daniel Woolf, Head of Policy at small business support platform and membership community Enterprise Nation, said:

This fresh flexibility in the Government’s approach to apprenticeships will open up new opportunities for young people within the small business community. Unpicking the complexity and unlocking funding will make a great deal of difference to small firms with no HR department, that often find these challenges tip the balance against apprenticeships.

If we are going to build a local workforce fit for the future, we must continue to recruit and train our young people, so this package of reforms is excellent news.

Alex Hall-Chen, Principal Policy Advisor for Skills at the Institute of Directors, said:

Getting more young people into apprenticeships at SMEs will help the next generation into rewarding careers while helping small businesses to access the talent they need to grow. Removing the cost and bureaucracy associated with the 5% co-investment is an important first step in making the system easier for SMEs to navigate.

Bethany Windsor, Head of Skills Policy at Logistics UK, said:

Apprenticeships are an ideal way for young people to enter careers like logistics, and today’s announcement will help more of them to discover the varied opportunities our sector has on offer.

Brian Berry, Chief Executive of the Federation of Master Builders (FMB), said:

The new apprenticeship reforms are a positive step forward for small builders who can often struggle to take on apprentices because of the cost burden. Enabling the nation’s small builders to train apprentices under the age of 25 for free is a much-needed boost to plug the construction skills gap. This new funding will help deliver the next generation of tradespeople to upgrade our existing homes and build the new ones we so desperately need.

Kate Nicholls, Chair of UKHospitality, said:

This is clear recognition within the Government’s skills policy that hospitality is a vital employer of young people and key to getting people of all ages into employment, offering rewarding work, vital core skills, and swift career progression.

The addition of hospitality to the sectors that can access foundation apprenticeships will provide more routes into work for young people and I look forward to continuing to work with the Government on its skills policy.