The Apprenticeship Funding Rules for training providers introduce a range of changes affecting employer contributions, apprenticeship funding eligibility, compliance processes and programme delivery.

While many of the updates provide clarification rather than entirely new policy, several changes will require providers to review their systems, documentation and employer communications before the start of the new funding year.

This article explains the key apprenticeship funding changes for 2026/27, helping training providers understand the new requirements and prepare for their implementation.

Subcontracting Changes and Future Reforms

The Department for Education has introduced further changes to subcontracting arrangements, including updates to de minimis exemptions and subcontracting oversight requirements. Providers should also note the revised deadline for subcontracting external auditor reports and the continued review of subcontracting definitions.

The DfE has proposed new definitions of subcontractors and “directly managed and controlled” individuals which is under review over the summer, with wider reforms expected from January 2027.

Training Plans Remain a Key Compliance Document

The training plan continues to play a central role in apprenticeship delivery and compliance.

Where the initial assessment is not recorded separately, a summary should be included within the training plan. In addition, providers, employers and apprentices must confirm that the planned content has been delivered at the end of the practical period.

There is also increasing emphasis on reconciling completed off-the-job training activity against the original training plan. Providers should ensure they can demonstrate how planned learning has been delivered throughout the apprenticeship.

English and Maths Delivery Requirements

The rules strengthen compliance expectations around English and maths delivery.

Active learning must be delivered in line with the agreed training plan and cannot be delivered entirely through self-directed distance learning. Providers must ensure learners are enrolled at the correct level based on their initial assessment, with the starting level immediately above the assessed level.

Providers should review their delivery and monitoring arrangements to ensure evidence clearly demonstrates that English and maths provision is taking place as planned.

Apprenticeship Funding Eligibility and Working Hours in England

The Apprenticeship Funding Rules 2026/27 provide further clarification on eligibility requirements, including the requirement for apprentices to spend at least 50% of their working hours in England.

Where an employer cannot confirm exact working locations at the start of the apprenticeship but can confirm that the apprentice will spend at least 50% of their working hours in England over the duration of the programme, providers must obtain a written statement from the employer confirming this.

The rules also provide flexibility where apprentices work from home as a reasonable adjustment due to disability.

Level 7 Qualifications and Level 6 Standards

The rules now explicitly confirm that a Level 7 non-mandatory unit or qualification must not be used to deliver the content of a Level 6 apprenticeship standard. This clarification appears within both the programme eligibility and funding eligibility sections of the rules.

Providers delivering higher-level and integrated apprenticeships should review qualification arrangements to ensure they meet the updated apprenticeship funding eligibility requirements.

Employer Co-Investment Changes

One of the most significant changes within the Apprenticeship Funding Rules 2026/27 for training providers relates to employer co-investment and the level of government funding available for different age groups.

Levy Employers with Insufficient Funds

For new apprenticeship starts from 1 August 2026, where a levy-paying employer has insufficient funds in their Apprenticeship Service account:

• Apprentices aged 25 and over will be funded through 75% government contribution and 25% employer co-investment, up to the funding band maximum.
• Apprentices aged 16 to 24 will be fully funded by government, up to the funding band maximum, with no employer contribution required.

This represents a substantial shift in funding arrangements and expands full-funding eligibility for younger apprentices.

Non-Levy Employers

For non-levy employers:

• Apprentices aged 16 to 24 will be fully funded.
• Apprentices aged 25 and over will continue to attract a 95% government contribution with a 5% employer contribution.

Completion Payment and Co-Investment Reforms

Several previous co-investment requirements have also been removed, including:

• Matching monthly government payments with equivalent employer co-investment payments.
• The requirement to collect and record co-investment before completion payments can be released.
• References allowing completion payments to be withheld where co-investment had not been collected.
• Requirements to collect specified levels of co-investment prior to the completion payment becoming due.

For completions on or after 1 August 2026, completion payments will be made once the apprentice has completed all apprenticeship activity and all elements of end-point assessment.

Changes to Terminology

The DfE has also amended the language used throughout the rules, focusing on the government’s contribution towards training and assessment costs rather than the employer’s contribution. This reflects the move towards a 95% government contribution model for eligible apprenticeships.

Pricing and ILR Reporting Changes

Providers must split learner-level pricing within the ILR between:

• TNP1 – Cost of training
• TNP2 – Cost of assessment

TNP1 must only contain training costs.

The rules also simplify pricing administration, with employers only needing to approve changes where the overall apprenticeship price increases.

Apprenticeship Hiring Payments

From 1 October 2026, eligible non-levy employers will receive a £2,000 hiring payment for new apprentices aged 16–24, including those starting Foundation Apprenticeships. This represents another important change to apprenticeship funding eligibility and financial support for employers.

• The apprentice must start their job within 90 days before their apprenticeship start date.
• The payment is made in two instalments: after 90 days and 365 days from the learning start date.
• For apprenticeships with a published typical duration of under 12 months, and for Foundation Apprenticeships, the second instalment is paid after 242 days instead.
• If an apprentice on a standard with a typical duration of 12 months or more completes in under 12 months, the second instalment is not paid.

Recognition of Prior Learning and Skills Scans

Providers can now complete skills scans against either:

• The apprenticeship standard’s Knowledge, Skills and Behaviours (KSBs); or
• The apprenticeship training plan.

Where training plans are used, providers must ensure robust mapping exists between the training plan and the apprenticeship standard.

The rules also strengthen expectations that the apprentice’s job role has a productive purpose and a clear and substantial link to their day-to-day occupational duties.

Employment, PAYE and Minimum Wage

Employers must maintain accurate PAYE information within their Apprenticeship Service account, while providers must verify that apprentices are included within the employer’s PAYE scheme.

The rules also confirm that where an apprentice is not receiving at least the National Minimum Wage, they must be withdrawn from the apprenticeship if the issue cannot be resolved.

Learning Support and Progress Reviews

Learning support reviews must continue at least every three months.

Where support relates to a permanent disability and needs are unlikely to change, providers may adopt a lighter-touch review process provided there is evidence that support remains necessary.

Progress reviews must evidence progress against the training plan. Alternative review schedules remain permissible where there is a documented delivery rationale, agreement in advance and no gap greater than six months between reviews.

Assessment and Gateway Changes

The terminology used throughout apprenticeship assessment has changed from “Gateway to Assessment” to “Gateway to Completion”.

Providers are also expected to engage an assessment organisation at the beginning of the apprenticeship and ensure that assessment arrangements align with the assessment plan throughout delivery.

Redundancy and Breaks in Learning

The rules clarify that fully funded apprentices may continue their programme if they become self-employed following redundancy, provided they are within six months of their final practical period date or have completed at least 75% of their practical period.

The rules also confirm that:

• A break in learning should be recorded after four weeks without employment.
• Apprentices must be withdrawn if they have not secured employment within 12 weeks of their employment ending.

The 2026/27 Apprenticeship Funding Rules bring some important changes for providers to get to grips with.

For additional support with funding compliance, check out our brand-new template, our updated funding compliance resources , or our on-demand webinar, ‘Apprenticeship Funding Rules Update’, all resources are linked below and available free to FIN members.

Click to access the Enrolment Form Template.

Click to access our Funding Compliance resources.

Click to access our on-demand webinar ‘Apprenticeship Funding Rules Update’.