The Government has announced a £725 million package of reforms to improve apprenticeship and training opportunities for young people. While much of the announcement centres on tackling youth unemployment, there could be benefits for small and medium-sized businesses.

Let’s take a look at what’s changing and how it could influence workforce planning over the next few years.

Fully Funded Apprenticeships for Under-25s at SMEs

One of the headline changes is the removal of the 5% co-investment rate for apprentices under 25 at small and medium-sized employers.

This means training costs for eligible apprentices will be covered entirely by government funding.

If you’ve previously avoided apprenticeships due to the training and assessment costs, it may be worth reconsidering them as a good way to fill entry-level vacancies and develop talent internally.

More Local Support in Finding Apprentices

The announced funding includes a £140 million pilot that will give Mayors the ability to connect young people with apprenticeship opportunities.

Of course, how effective this will be depends on how the scheme is implemented in your local area, but this should translate to more support for businesses in finding applicants.

Foundation Apprenticeships and Short Courses

Additional foundation apprenticeships are due to be rolled out in sectors such as retail and hospitality.

Foundation apprenticeships were first introduced in May 2025 and are designed to bridge the gap between formal learning in school or college and the workplace, helping make young people ‘work-ready’. These may be useful if you find you currently have to invest substantial time in early training.

Beginning in April 2026, the possibility of short courses will be introduced to apprenticeships allowing more flexible training options that better suit you. A new Level 4 apprenticeship in AI will also be introduced, which could help develop workforce skills.

In summary…

Clearly, it will take time for these changes to have a meaningful effect, but it could be worth reviewing whether fully funded under-25 apprenticeships could support recruitment needs you may have later in the year.

There could also be further news on apprenticeships over the coming months as the government has said that the Department for Work & Pensions and Skills England will be working with businesses on the right balance to further boost apprenticeship starts for young people while delivering the right flexibilities for businesses.

This could be a subject to watch for 2026!