Apprenticeship Funding Rules 2026/27: Provider Compliance Guide
Updated: Aug 21
The apprenticeship funding rules set out the requirements that training providers and employers must follow when using government funding for apprenticeship training and assessment in England.
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The 2026/27 rules apply to new apprenticeships starting on or after 1 August 2026. They introduce important changes to employer co-investment, training for younger apprentices, evidence requirements, active learning and funding administration.
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Training providers may continue to manage apprentices who started under earlier funding years. This means different rules can apply to learners within the same employer, apprenticeship standard or cohort.
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Understanding which requirements apply to each apprentice is essential. Errors involving eligibility, prior learning, off-the-job training, employer contributions or ILR records can place funding at risk and lead to financial recovery.
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Skills Office Network supports apprenticeship providers to interpret funding requirements, strengthen evidence and identify compliance risks before an external audit.
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Table of Content:
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What Are the Apprenticeship Funding Rules?
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The apprenticeship funding rules explain how government funding can be used to support apprenticeship training and assessment in England.
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They apply to:
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Main apprenticeship providers
Employer-providers
Employers accessing apprenticeship funding
Apprenticeship delivery and on-programme assessment
Training funded through the apprenticeship service
Government and employer co-investment
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The rules cover the complete apprenticeship journey, including:
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Learner eligibility
Employment status
Residency
Initial assessment
Recognition of prior learning
Apprenticeship agreements
Training plans
Off-the-job training
Active learning
Progress reviews
English and maths
Employer contributions
Additional payments
Learning support
Changes in circumstances
Breaks in learning
Evidence requirements
ILR reporting
Apprenticeship assessment
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The Department for Work and Pensions is now responsible for the apprenticeship funding rules, working alongside the Department for Education and Skills England across the wider skills system.
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Providers should ensure that internal policies, staff guidance and employer-facing documents refer to the correct funding year and current departmental responsibilities.
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When Do the 2026/27 Funding Rules Apply?
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The apprenticeship funding rules 2026/27 apply to apprenticeships starting on or after 1 August 2026, unless a particular rule states otherwise.
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Apprentices who started before this date normally continue under the funding rules that applied when their apprenticeship began.
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Providers should not automatically apply the latest rules to every learner.
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For each apprentice, staff should be able to identify:
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The learning start date
The practical period start date
The relevant funding year
The applicable version of the funding rules
The apprenticeship standard and version
The published off-the-job training requirement
The employer’s levy status
Any co-investment requirement
Any rules applying to a change in circumstances
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A single employer may therefore have apprentices subject to different co-investment, off-the-job training or evidence requirements.
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Skills Office Network’s Funding Assurance Review can test whether providers are applying the correct funding rules across different learner cohorts and start dates.
Key Apprenticeship Funding Rule Changes for 2026/27
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The 2026/27 rules include several changes that providers need to reflect within operational processes.
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Key developments include:
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New employer co-investment rates
Fully funded training for eligible apprentices aged 16–24
A new £2,000 hiring payment for eligible non-levy employers
Updated levy account arrangements
Removal of the link between collecting co-investment and releasing the completion payment
Clarified learner eligibility requirements
Updated evidence requirements
Alignment with the wider Growth and Skills Levy
Further requirements around active learning and training plans
Separate funding rules for apprenticeship units
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Providers should review the final published rules rather than relying on the draft released earlier in 2026.
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The final version has already been updated several times, including changes to employer co-investment policy. Compliance teams should record which version was reviewed and how each relevant change was implemented.
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Learner Eligibility
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Providers must confirm that each apprentice is eligible for funding before the apprenticeship begins.
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Eligibility checks should include:
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The apprentice’s identity
Date of birth
Residency status
Right to work
Employment status
Working arrangements
Location of employment activity
Previous education and training
Other government-funded programmes
The suitability of the apprenticeship for the job role
Any standard-specific eligibility restrictions
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The apprentice must normally spend at least 50% of their working hours in England over the duration of the apprenticeship.
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For remote or hybrid workers, providers should obtain sufficient evidence to demonstrate where the apprentice is expected to work. Where an employer operates across several countries or UK nations, a written employer declaration or representative working pattern may support the eligibility decision.
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Individuals participating in a government-funded Skills Bootcamp are not eligible to receive apprenticeship funding at the same time.
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Providers must also check whether a particular apprenticeship standard has additional age or funding restrictions. For example, funding for the Level 2 Administration Assistant standard is restricted to eligible younger apprentices for new starts under the current rules.
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Eligibility should not be treated as a checklist completed without professional judgement. The provider must understand the apprentice’s circumstances and retain evidence supporting the decision.
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Employment and the Apprentice’s Job Role
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An apprentice must have genuine employment and work for reward under an appropriate apprenticeship agreement.
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The job role must allow the apprentice to develop and apply the occupational knowledge, skills and behaviours set out in the relevant standard.
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Providers should confirm:
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The identity of the employer
The apprentice’s employment start date
Contracted working hours
The duration of employment
The apprentice’s main duties
The relationship between the job role and apprenticeship
The name of the apprentice’s line manager or workplace supervisor
Whether the apprentice has sufficient opportunity to practise new skills
Whether employment will cover the practical period
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A job title alone is not sufficient evidence that the apprenticeship is appropriate. Providers should understand what the apprentice does in practice and how the role will support occupational development.
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Where an apprentice changes employer, working hours or job role, the provider must review whether the apprenticeship remains eligible and update the relevant records.
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Initial Assessment and Prior Learning
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Every apprentice must receive an initial assessment before eligible training begins.
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The assessment should establish the apprentice’s starting point and determine:
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Existing knowledge
Existing occupational skills
Previous qualifications
Relevant work experience
Prior learning
English and maths needs
Learning support requirements
Career goals
Training required to achieve occupational competence
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The process should be proportionate but sufficiently detailed to identify whether the apprentice requires substantial new learning.
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Providers should not enrol an individual onto a full apprenticeship where they already possess most of the required occupational competence.
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Where relevant prior learning is identified, the provider must:
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Assess and evidence the prior learning.
Remove duplicated training from the programme.
Adjust the off-the-job training requirement where appropriate.
Reduce the price in proportion to the training no longer required.
Agree the revised content and price with the employer.
Record the decision within the evidence pack and training plan.
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The price reduction must reflect the amount of training removed. A provider cannot retain the full price while delivering materially less training because of prior learning.
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For apprentices aged 16–18, relevant prior learning may be less likely unless they have previously undertaken aligned employment, a T Level, another apprenticeship or comparable occupational training.
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However, providers must still carry out the required checks and record the decision.
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The Apprenticeship Agreement
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The apprenticeship agreement is between the employer and apprentice.
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It confirms that the individual is employed as an apprentice and identifies the apprenticeship for which they are being trained.
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Providers should check that the agreement:
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Identifies the correct employer and apprentice
Names the apprenticeship standard
Covers the practical period
Is signed by the relevant parties
Is consistent with the employment contract
Reflects the actual start and planned end dates
Remains valid following significant changes
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The provider must retain evidence that a compliant apprenticeship agreement is in place.
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Where the agreement is missing, incomplete or inconsistent with delivery, the associated funding may be at risk.
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The Training Plan
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The training plan is agreed between the apprentice, employer and provider.
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It should explain how the apprenticeship will be delivered and how each party will support successful completion.
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The plan should include:
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The apprentice’s starting point
Prior learning
Planned training content
The delivery model
Off-the-job training
Training schedule
Employer-led activity
English and maths where applicable
Learning support arrangements
Progress review expectations
Assessment preparation
Responsibilities of the apprentice, employer and provider
The planned practical period
Any individual adjustments
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The training plan should be an active working document rather than a form completed at enrolment and never revisited.
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Providers should update it when:
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Training content changes
Prior learning is identified
The apprentice changes role or employer
Working hours change
Support needs change
Delivery is rescheduled
A break in learning occurs
The planned completion date changes
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At the end of the programme, the employer, provider and apprentice must confirm that the content of the training plan has been delivered. This confirmation can be recorded within the training plan or the provider’s gateway process.
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Off-the-Job Training Requirements
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Off-the-job training develops new occupational knowledge, skills and behaviours relevant to the apprenticeship.
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It must take place during the apprentice’s normal working hours.
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For apprentices starting from 1 August 2025 onwards, the previous calculation based on 20% of working hours has been replaced.
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Each apprenticeship standard now has a published minimum volume of off-the-job training hours.
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Providers must identify the correct minimum requirement for the standard and version being delivered.
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Eligible off-the-job training may include:
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Tutor-led workshops
Coaching focused on new occupational competence
Practical training
Structured online learning
Work shadowing with a defined learning purpose
Projects
Assignments
Simulations
Employer-led training
Industry visits
Learning activities directly related to the standard
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Activity must genuinely teach new knowledge, skills or behaviours. Performing the apprentice’s normal duties without structured learning does not qualify.
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Progress reviews and onboarding activities do not count as off-the-job training.
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Providers should record:
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The date of the activity
What was delivered
The learning objective
How it relates to the standard
The duration
Who delivered or supported it
Evidence of apprentice participation
What the apprentice learned
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Recording only the number of hours without describing the learning may not provide sufficient evidence.
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Minimum Apprenticeship Duration
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For apprentices starting from 1 August 2025 onwards, the practical period must normally last for at least eight months.
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This replaced the previous statutory minimum duration of 12 months.
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The published typical duration of an apprenticeship standard may be longer than eight months. Providers should design a realistic programme that allows the apprentice to complete all planned training and develop occupational competence.
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The eight-month requirement should not be treated as the recommended duration for every apprentice.
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Where relevant prior learning allows an accelerated programme, the provider must still ensure that:
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The statutory minimum practical period is met
The adjusted off-the-job training requirement is delivered
The programme includes substantial new learning
The price is reduced appropriately
The employer and apprentice agree the revised plan
The apprentice has sufficient time to become occupationally competent
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Active Learning
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The funding rules require apprentices to remain engaged in active learning throughout the practical period.
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Some eligible learning must normally take place at least monthly or quarterly, depending on the approved delivery model.
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The requirement supports learner engagement and provides evidence that monthly government payments relate to genuine training activity.
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There is no minimum volume of active learning that must take place in each applicable period. However, the activity must be meaningful, eligible and supported by evidence.
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Providers should plan active learning within the training plan and monitor whether scheduled activity takes place.
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If planned learning is missed because of sickness, annual leave or another temporary circumstance, it should be rearranged so that the complete training plan can still be delivered.
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Where there is no plan for active learning within the required period, a break in learning may be necessary.
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Providers should distinguish between off-the-job training active learning and English and maths active learning where separate requirements apply.
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Common risks include:
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Long gaps with no evidence of learning
Retrospectively created activity logs
Normal workplace duties recorded as training
Progress reviews used as the only evidence of learning
Generic activity descriptions
Learning recorded without apprentice confirmation
Breaks in learning not used when required
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Progress Reviews
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Progress reviews bring together the apprentice, employer and provider.
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They should assess whether the apprentice is progressing against the training plan and identify any action required.
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A meaningful progress review should cover:
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Learning completed
Knowledge, skills and behaviours developed
Application of learning in the workplace
Progress against planned milestones
Off-the-job training
Employer feedback
Apprentice feedback
English and maths progress
Learning support
Safeguarding and wellbeing
Barriers to progress
Clear actions and deadlines
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Reviews should be specific to the apprentice rather than relying on repetitive or generic comments.
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The employer should participate and provide evidence of how learning is being applied in the workplace.
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Where a different review frequency has been agreed, providers should retain evidence that the arrangement remains appropriate and supports effective oversight.
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Employer Co-investment
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Employer co-investment arrangements changed for new starts from 1 August 2026.
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Employers That Do Not Pay the Apprenticeship Levy
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For eligible apprentices aged 16–24:
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The government funds 100% of eligible training and assessment costs.
Funding is limited to the maximum funding band.
The employer does not make a co-investment contribution.
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For apprentices aged 25 or over:
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The employer contributes 5%.
The government contributes 95%.
Contributions apply up to the funding band maximum.
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Levy-Paying Employers with Insufficient Funds
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Available levy funds are used first.
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Once the account has insufficient funds, the arrangements for new starts are:
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Eligible apprentices aged 16–24 receive fully funded training and assessment.
For apprentices aged 25 or over, the employer contributes 25%.
The government contributes the remaining 75%.
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Providers must not confuse a non-levy employer with a levy-paying employer that has exhausted its funds. The contribution for an apprentice aged 25 or over is different.
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Employers remain responsible for paying any agreed price above the maximum funding band.
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The mandatory link between collecting employer co-investment and releasing the completion payment has been removed for completions from 1 August 2026. However, contracts between providers and employers remain legally binding, and providers should continue to manage outstanding contributions appropriately.
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Apprenticeship Levy Changes
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From 1 August 2026:
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New levy funds entering employer accounts no longer receive the 10% government top-up.
New funds expire after 12 months rather than 24 months.
Funds that entered on or before 31 July 2026 retain their previous 24-month expiry period.
Employers can use eligible funds across the wider Growth and Skills Levy offer.
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Training providers should ensure employer communications no longer present the 10% top-up or 24-month expiry as applying to all funds.
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Employers should also understand that levy funds are used before government funding applies to eligible younger apprentices.
Funding Bands and Negotiated Price
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Every apprenticeship standard is allocated to a funding band.
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The current funding bands range from £1,500 to £27,000.
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The funding band determines the maximum amount that:
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A levy-paying employer can use from its apprenticeship service account
The government will contribute for a non-levy employer
The government will co-invest when levy funds are insufficient
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The employer and provider must agree an appropriate price for training and assessment.
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The agreed price should reflect:
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The training required
The apprentice’s starting point
Prior learning
Delivery hours
Delivery method
Required assessment
Any eligible qualifications
The resources required to deliver the programme
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If the agreed price exceeds the funding band maximum, the employer must pay the difference from its own funds.
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Providers should retain evidence of the agreed price and any changes made during the programme.
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What Apprenticeship Funding Can Pay For
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Eligible funding may support:
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Initial assessment
Eligible off-the-job training
Teaching and coaching
Training materials
Eligible mandatory qualifications
Apprenticeship assessment
Educational trips directly related to the standard
Administration directly connected to eligible training
Certain English and maths provision
Eligible learning support
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The exact eligibility of a cost depends on the funding rules and the apprenticeship being delivered.
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Providers should be able to explain how each cost contributes to eligible training or assessment.
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Ineligible Costs
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Apprenticeship funding cannot normally be used for:
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Apprentice wages
Recruitment costs
Travel to the apprentice’s normal workplace
General line management
Equipment required only for the apprentice’s normal job
Employer business expenses
Training unrelated to the apprenticeship
Activities completed outside the eligible practical period
Duplicate training already covered by prior learning
Costs above the funding band maximum
Activities that do not develop new occupational competence
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Including an ineligible cost within the negotiated price may lead to funding recovery.
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A Funding Assurance Review can assess whether learner evidence, training activity and funding claims meet the current rules.
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English and Maths
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Providers must identify the apprentice’s English and maths position during initial assessment.
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The requirements depend on factors including:
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The apprentice’s age
Prior qualifications
The apprenticeship level
The applicable funding rules
The apprentice’s individual needs
Whether the employer and apprentice choose available flexibilities
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Where English or maths funding is claimed, providers must retain evidence of eligible delivery and learner participation.
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English and maths support should be appropriate to the apprentice’s starting point and occupational needs.
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Providers should avoid assuming that an existing qualification automatically removes the need for broader literacy or numeracy development within the occupational curriculum.
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Learning Support
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Learning support funding is available where an apprentice has an identified learning difficulty or disability that requires reasonable adjustments to complete the apprenticeship.
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Providers must assess the learner’s needs and retain evidence showing:
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The identified learning difficulty or disability
How it affects the apprentice’s ability to complete the programme
The reasonable adjustments required
The cost of providing the adjustments
The apprentice’s agreement to the support plan
Evidence that the support was delivered
Regular reviews of whether the support remains necessary
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Learning support funding cannot be used simply to address ordinary gaps in knowledge or skills.
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For apprenticeships, the provider must review the need for learning support at least every three months and carry out the first review one month after the adjustments begin.
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Claims should be made only for periods where eligible support is required, delivered and results in a cost.
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Additional Payments and Hiring Incentives
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The funding rules include additional support for certain apprentices, employers and providers.
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This includes:
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£1,000 for employers supporting eligible younger apprentices or apprentices with an Education, Health and Care plan or care experience
£1,000 for providers supporting the same eligible groups
A £3,000 Care Leavers Bursary paid to eligible apprentices through the provider
A hiring payment of up to £2,000 for eligible non-levy employers recruiting apprentices aged 16–24 from 1 October 2026
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Each payment has separate eligibility, evidence and payment requirements.
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Providers must ensure that funds intended for employers or apprentices are passed on within the required timeframe.
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Financial controls should include reconciliation of funding reports, approval of outgoing payments and evidence that the correct recipient received the money.
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Changes in Apprentice Circumstances
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Providers must respond promptly when an apprentice’s circumstances change.
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This may include:
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Change of employer
Redundancy
Change in job role
Change in working hours
Long-term absence
Parental leave
Break in learning
Withdrawal
Change in residency status
Change in learning support needs
Completion earlier or later than planned
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The provider should assess how the change affects eligibility, delivery, price, training plan, apprenticeship service records and the ILR.
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Operational records and ILR data should reflect the same learner status.
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Skills Office Network’s ILR and Data Support helps providers review changes in circumstance, investigate data mismatches and maintain accurate monthly submissions.
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Breaks in Learning
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A break in learning should be used where the apprentice intends to return to the same apprenticeship but eligible training cannot continue for a period.
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The provider should retain evidence showing:
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Why the break is required
The expected return date
Agreement from the apprentice and employer
The last date of eligible learning
The impact on the training plan
The revised planned end date
Communication during the break
Confirmation when the apprentice returns
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A break should not be used simply to keep an inactive learner on programme or delay recording a withdrawal.
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Where the apprentice no longer intends to return, the provider should record the correct withdrawal information promptly.
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ILR and Apprenticeship Service Reconciliation
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The ILR must accurately reflect the apprentice’s eligibility, learning activity and current status.
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Providers should reconcile the ILR against:
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Apprenticeship service records
Employer contracts
Apprenticeship agreements
Training plans
Initial assessment
Prior learning decisions
Off-the-job training records
Progress reviews
Employer payment records
Break and withdrawal documentation
Achievement and assessment information
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Common data risks include:
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Incorrect start or end dates
Mismatched prices
Incorrect employer information
Missing employer approvals
Learners remaining active after learning has stopped
Unrecorded breaks
Late withdrawals
Incorrect learning support claims
Incorrect additional payment coding
Inconsistent prior learning reductions
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Providers should use period-end reports, validation tools and internal management information to identify discrepancies before submission.
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Skills Office Network’s ILR and Data Support includes data validation, error resolution, period-end checks, forecasting and submission support.
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Evidence Requirements
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Providers must retain evidence demonstrating that apprenticeship funding has been used appropriately.
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The evidence pack should allow an auditor to understand:
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Why the apprentice was eligible
Why the apprenticeship was appropriate
What prior learning was identified
What training was required
What training was delivered
How the apprentice participated
How the employer supported the programme
Why the agreed price was appropriate
How changes were managed
Whether claims and payments were correct
Whether the apprentice completed the planned programme
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Evidence can be held electronically and electronic signatures are accepted.
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However, providers must have systems that confirm the evidence is authentic, attributable to the correct person and protected from inappropriate alteration.
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Most evidence should arise naturally from normal delivery. Providers should not rely on documents created retrospectively when an audit is announced.
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Common Funding Compliance Risks
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Common apprenticeship funding rule risks include:
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Applying the wrong funding year
Weak learner eligibility evidence
Inappropriate apprenticeship job roles
Generic initial assessment
Insufficient recognition of prior learning
Failure to reduce the price
Missing apprenticeship agreements
Training plans that do not reflect delivery
Using the old 20% off-the-job calculation for new starts
Insufficient evidence of learning
Long periods without active learning
Incorrect employer co-investment
ILR and apprenticeship service mismatches
Unsupported learning support claims
Payments not passed to employers or apprentices
Ineligible costs included in the price
Learners remaining active after training has stopped
Weak management of breaks and withdrawals
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Providers should use risk-based sampling to check both learner files and wider operational systems.
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Skills Office Network’s Funding Assurance Review independently tests evidence, data and processes to identify potential funding exposure before an external audit.
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Governance and Oversight
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Funding compliance should not sit solely with the data or compliance team.
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Senior leaders and governors should receive clear information about:
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Funding assurance findings
ILR errors
Employer co-investment
Learning support claims
Withdrawals
Breaks in learning
Apprentices past planned end date
High-risk standards and employers
Corrective actions
Potential financial exposure
Repeat areas of non-compliance
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Governors should challenge whether actions have resolved the underlying issue rather than simply correcting an individual learner file.
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Skills Office Network’s Governance Support helps providers strengthen oversight, risk management and accountability across funded provision.
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How Providers Can Prepare for a Funding Audit
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Providers should maintain audit readiness throughout the year.
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Practical actions include:
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Identify the funding rules applying to every learner cohort.
Update enrolment and initial assessment processes.
Train delivery, finance, employer engagement and data teams.
Review off-the-job training against published standard requirements.
Monitor active learning and inactive learners.
Reconcile ILR and apprenticeship service records.
Sample employer co-investment and additional payments.
Review learning support claims.
Check changes in learner circumstances.
Test whether corrective actions are implemented consistently.
Report material risks to leaders and governors.
Conduct independent funding assurance reviews.
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Providers requiring regular operational support can access Skills Office Network’s 360 Degree Support, including ILR management, learner portfolio audits, consultancy and contract performance reviews.
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Frequently Asked Questions
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What are the apprenticeship funding rules?
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The apprenticeship funding rules set out how government funding can be used for apprenticeship training and assessment in England. They cover eligibility, employment, training, evidence, employer contributions and provider responsibilities.
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When do the apprenticeship funding rules 2026/27 apply?
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They apply to new apprenticeship starts from 1 August 2026, unless an individual rule states otherwise.
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What is the minimum apprenticeship duration?
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For new starts from 1 August 2025, the practical period must normally last for at least eight months. The published typical duration for an individual standard may be longer.
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Is off-the-job training still 20%?
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Not for apprentices starting from 1 August 2025. Each apprenticeship standard now has a published minimum number of off-the-job training hours.
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What is active learning?
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Active learning is eligible training that keeps the apprentice engaged and progressing. It must normally take place at least monthly or quarterly, depending on the delivery model.
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How much does a non-levy employer contribute?
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For new starts from 1 August 2026, eligible apprentices aged 16–24 are fully funded. For apprentices aged 25 or over, a non-levy employer normally contributes 5%.
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What happens when a levy-paying employer runs out of funds?
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Eligible apprentices aged 16–24 receive fully funded training and assessment. For apprentices aged 25 or over, the employer contributes 25% and the government contributes 75%, up to the funding band maximum.
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What evidence must training providers keep?
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Providers must retain evidence supporting learner eligibility, initial assessment, prior learning, employment, training delivery, active learning, employer engagement, funding claims and changes in circumstances.
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Can apprenticeship evidence be signed electronically?
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Yes. Electronic evidence and digital signatures are accepted where the provider has suitable systems to confirm authenticity and learner eligibility.
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Strengthen Your Apprenticeship Funding Compliance
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The apprenticeship funding rules 2026/27 introduce important changes across eligibility, co-investment, off-the-job training, active learning and evidence.
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Providers must apply the correct rules to each apprentice and maintain records that demonstrate genuine, eligible training.
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Skills Office Network supports apprenticeship providers with:
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Funding rule interpretation
Learner file sampling
Prior learning and eligibility checks
Employer co-investment reviews
Audit preparation
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Our specialists can help you identify funding risks, strengthen internal controls and prepare confidently for external scrutiny.
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