DfE Update for Training Providers: Key Changes in 2026
Updated: Aug 21
Last updated: 21 August 2026
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The latest DfE update includes significant changes affecting apprenticeship and post-16 training providers across England.
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The 2026 reforms include new apprenticeship funding rules, the expansion of the Growth and Skills Levy, fully funded training for eligible young apprentices, apprenticeship hiring incentives, new apprenticeship units and the withdrawal of government funding from selected standards.
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Providers must also respond to revised Ofsted inspection arrangements, changes to the apprenticeship accountability framework, updated financial governance guidance and new ILR funding models.
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Some apprenticeship responsibilities moved from the Department for Education to the Department for Work and Pensions on 1 April 2026. However, DfE Update continues to communicate important information affecting further education, skills and apprenticeship providers.
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Skills Office Network helps training providers understand policy changes, assess operational risks and implement compliant processes across funding, ILR data, quality, governance and inspection readiness.
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Table of Content:
What Is DfE Update?
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DfE Update is the government’s regular communication service for organisations working across further education, skills and post-16 training.
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It provides information about:
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Funding rules
Funding allocations
ILR and data requirements
Apprenticeship policy
Adult skills funding
Subcontracting
Financial governance
Qualification reforms
Apprenticeship incentives
Deadlines and required provider actions
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The Education and Skills Funding Agency closed on 31 March 2025. As part of this change, ESFA Update was renamed DfE Update.
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Providers should monitor DfE Update regularly, but receiving an update is not enough. Each organisation must determine whether a change affects its contracts, learners, systems, employer communications or delivery model.
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DfE and DWP Responsibilities in 2026
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The government’s skills and apprenticeship responsibilities are now shared across the Department for Education and the Department for Work and Pensions.
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From 1 April 2026, responsibility for several apprenticeship areas moved to DWP, including the apprenticeship accountability framework and key elements of apprenticeship funding policy.
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However, DfE continues to have important responsibilities across education, qualifications, post-16 provision and the wider skills system.
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Training providers may therefore receive guidance, contracts or communications involving both departments.
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This shared responsibility is reflected in documents such as the 2026 Financial Handbook for Independent Training Providers, which applies to eligible providers receiving funding directly from DfE and DWP.
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Providers should review internal documents that continue to refer only to ESFA or DfE where responsibilities have changed. This may include:
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Policies and procedures
Funding assurance documentation
Governance reports
Risk registers
Contracts
Staff training materials
Employer guidance
Audit preparation documents
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Outdated terminology may not automatically create non-compliance, but it can indicate that operational processes have not been reviewed against current requirements.
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Skills Office Network’s consultancy services can help providers interpret policy changes and update processes, policies and responsibilities across their organisation.
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Apprenticeship Funding Rules 2026/27
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The apprenticeship funding rules for 2026/27 apply to new apprenticeship starts from 1 August 2026.
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Providers must apply the funding rules associated with each apprentice’s start date. This means organisations may manage apprentices under different sets of rules at the same time.
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Key areas providers need to review include:
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Employer co-investment
Fully funded training for younger apprentices
Levy fund expiry
Removal of the levy top-up
Training price and funding bands
Apprentice eligibility
Prior learning
Training plans
Active learning
Off-the-job training
Employer responsibilities
Evidence requirements
Apprenticeship assessment
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Providers should not apply the newest rules retrospectively unless the guidance specifically confirms that a change applies to existing learners.
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A Funding Assurance Review can help providers test whether the correct funding rules have been applied across different cohorts and start dates.
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Growth and Skills Levy Changes
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The apprenticeship levy is evolving into a wider Growth and Skills Levy offer.
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From 1 August 2026, employers can use available apprenticeship service account funds for:
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Full apprenticeships
Foundation apprenticeships
Approved apprenticeship units
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The expansion gives employers more flexibility to address specific skills gaps, but each funded product has its own eligibility, delivery, evidence and assessment requirements.
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Training providers should not assume that apprenticeship units follow exactly the same rules as full apprenticeships.
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The Growth and Skills Levy reforms also changed how levy funds enter and leave employer accounts.
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Removal of the 10% Government Top-Up
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The government no longer adds a 10% top-up to new levy funds entering apprenticeship service accounts from 1 August 2026.
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Existing funds retain any top-up previously applied.
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Shorter Fund Expiry Period
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New levy funds entering employer accounts from 1 August 2026 expire after 12 months if they are not used.
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Funds that entered an account on or before 31 July 2026 continue to follow the previous 24-month expiry period.
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Training providers should review employer communications and financial illustrations to ensure they no longer describe every levy fund as lasting 24 months or receiving a 10% top-up.
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Employer Co-investment Changes
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Employer co-investment arrangements changed for new starts from 1 August 2026.
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Where an employer does not pay the apprenticeship levy:
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Training and assessment for eligible apprentices aged 16–24 is fully funded up to the funding band maximum.
For apprentices aged 25 or over, the employer contributes 5%.
The government contributes the remaining 95%.
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Where a levy-paying employer has insufficient funds:
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Available levy funds are used first.
Training and assessment for eligible apprentices aged 16–24 is fully funded after the levy funds are exhausted.
For apprentices aged 25 or over, the employer contributes 25%.
The government contributes the remaining 75%.
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This creates an important distinction between a non-levy employer and a levy-paying employer whose account has insufficient funds.
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Providers must explain potential employer contributions accurately and ensure contracts, payment schedules, apprenticeship service records and the ILR remain consistent.
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Skills Office Network’s ILR and Data Support helps providers review learner records, investigate funding discrepancies and maintain accurate submissions.
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Fully Funded Training for Young Apprentices
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From 1 August 2026, eligible apprenticeship training and assessment costs are fully funded for new apprentices aged 16–24, up to the funding band maximum.
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For levy-paying employers, available levy funds are still used first. Full government funding applies once the employer’s levy account has insufficient funds.
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For employers that do not pay the levy, the government covers eligible costs from the start.
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Fully funded training is not a cash payment to the employer. It means the employer does not need to contribute towards eligible training and assessment costs within the funding band.
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Providers should ensure employer-facing marketing makes this distinction clear and does not describe fully funded training as a guaranteed cash grant.
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The £2,000 Young Apprentice Hiring Payment
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From 1 October 2026, eligible employers that do not pay the apprenticeship levy can receive a hiring payment of up to £2,000 when recruiting a new apprentice aged 16–24.
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The apprentice must:
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Have a practical period start date on or after 1 October 2026
Be aged 16–24 at the start of training
Be included within the relevant PAYE scheme
Not have been employed by the employer for more than 90 days before the practical period begins
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The payment is separate from fully funded apprenticeship training, employer National Insurance relief and existing additional payments.
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Training providers are responsible for maintaining accurate eligibility records, monitoring payments and passing applicable funding to employers within the required timeframe.
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Providers should not promise the payment before eligibility has been confirmed.
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Additional Support for Employers and Apprentices
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Several other forms of support may be available alongside the new hiring payment.
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Existing £1,000 Employer Payment
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Employers may receive £1,000 when supporting an apprentice who is:
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Aged 16–18
Aged 19–24 and has an Education, Health and Care plan
Aged 19–24 and is or has previously been in local authority care
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This payment is normally made through the training provider in two £500 instalments.
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Employer National Insurance Relief
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Employers do not normally pay Class 1 employer National Insurance contributions for eligible apprentices under 25 who earn less than £50,270 per year.
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Care Leavers Bursary
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Eligible care-experienced apprentices may receive a £3,000 bursary.
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This funding belongs to the apprentice, not the employer. The provider receives the instalments and must pass them directly to the apprentice within the required timeframe.
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Providers must distinguish clearly between employer payments, provider payments and learner bursaries.
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Incorrect coding, delayed payments or weak eligibility evidence may result in missed support or funding compliance concerns.
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Apprenticeship Units
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Apprenticeship units were introduced in April 2026 to provide shorter, targeted training in priority skills areas.
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Units generally involve between 30 and 140 delivery hours and draw on knowledge and skills from existing occupational standards.
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Initial areas include:
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Artificial intelligence leadership
Electrical and mechanical fitting
Electric vehicle charging
Solar photovoltaic installation
Mechanised welding
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The offer may continue to develop as new units are approved.
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Apprenticeship units are subject to separate funding rules. Providers must understand requirements covering:
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Learner eligibility
Employer eligibility
Initial assessment
Training plans
Delivery hours
Funding rates
Milestone payments
Assessment
Outcome confirmation
Evidence
ILR reporting
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Providers should also note that subcontracting of apprenticeship unit delivery is not permitted under the current unit funding rules.
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Skills Office Network’s consultancy services can help providers review the operational implications of new funded products and develop compliant delivery processes.
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New ILR Funding Models
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From 10 August 2026, new funding models became available within the Enter Learning Data service.
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These include:
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FM39 for Growth and Skills short-course apprenticeship units
FM25 for study programmes
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Enter Learning Data now supports:
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Funded apprenticeship standards under FM36
Non-funded apprenticeship activity under FM99
Apprenticeship units under FM39
Study programmes under FM25
Care to Learn under FM82
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Providers need to ensure that staff understand which funding model applies to each learner and programme.
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Incorrect funding models can affect validation, payments, reporting and performance information.
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Providers should test new data processes before submission and reconcile ILR records with contracts, training plans, apprenticeship service records and operational delivery.
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Skills Office Network’s ILR and Data Support provides ongoing assistance with data validation, period-end reports, error resolution, forecasting and compliant submission.
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Withdrawal of Funding from Apprenticeship Standards
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Government funding is being withdrawn from 16 apprenticeship standards from September 2026 as investment is redirected towards younger apprentices and priority skills.
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The affected standards include three widely used leadership and management apprenticeships.
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Existing learners can normally continue and complete their programme. However, providers must manage new starts, start limits and employer communications carefully.
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Employers may still choose to fund affected standards privately, subject to the applicable rules for privately funded apprenticeships.
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Providers affected by the changes should review:
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Planned new starts
Employer commitments
Marketing materials
Recruitment pipelines
Contracts
Financial forecasts
Staff capacity
Curriculum plans
Privately funded delivery options
Teach-out arrangements for existing learners
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Providers should avoid promoting a funded apprenticeship after its funding eligibility has ended.
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Foundation Apprenticeships
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Foundation apprenticeships are designed to provide young people with an entry route into employment and further occupational training.
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During 2026, the offer expanded across areas including:
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Construction and the built environment
Digital
Engineering and manufacturing
Health and social care
Catering and hospitality
Retail service, supply and administration
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Foundation apprenticeships generally support young people aged 16–21, with extended eligibility for certain learners aged up to 24.
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They run for at least eight months and combine employment with structured training.
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Providers delivering foundation apprenticeships must follow the relevant rules rather than applying full apprenticeship processes without adjustment.
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Quality, safeguarding, inclusion, employer engagement and progression remain central to successful delivery.
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Apprenticeship Accountability Framework Changes
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The apprenticeship accountability framework was updated in January 2026.
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Key changes include:
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One combined set of quality indicators
Suspension of breaks in learning as a formal indicator
Suspension of off-the-job training as a formal indicator
Suspension of end-point assessment organisation data
A revised apprentices past planned end date indicator
New “on track”, “needs improvement” and “at risk” classifications
Alignment with the renewed Ofsted inspection framework
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The current indicators include:
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Achievement
Retention
Withdrawals
Apprentices past planned end date
Employer feedback
Apprentice feedback
Ofsted outcomes
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Providers should monitor performance throughout the academic year rather than waiting for final QAR data or a management review.
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Skills Office Network’s Governance Support helps boards and leaders strengthen accountability, performance scrutiny and oversight of improvement activity.
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Ofsted Inspection Changes
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Ofsted introduced its renewed education inspection framework and further education and skills toolkit in November 2025.
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Updated inspection materials take effect from September 2026.
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The framework uses report card judgements and includes evaluation areas such as:
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Leadership and governance
Inclusion
Safeguarding
Curriculum
Teaching and training
Achievement
Participation and development
Apprenticeship provision
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Ofsted has clarified that providers are not expected to create a separate written document for every standard in the inspection toolkit.
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Inspectors focus on the quality and impact of leaders’ decisions, the apprentice experience and whether improvement activity produces meaningful results.
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Skills Office Network’s Ofsted Inspection Support includes mock inspections, safeguarding and Prevent reviews, SAR and QIP support, evidence reviews and preparation for lead nominees, leaders and governors.
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Financial Handbook for Independent Training Providers
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The updated Financial Handbook for Independent Training Providers took effect on 1 August 2026.
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It applies to eligible independent training providers receiving funding directly from DfE and DWP for the duration of their contracts for services.
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The handbook covers:
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Financial governance
Management and oversight
Internal controls
Assurance
Provider responsibilities
Financial reporting
Risk management
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The 2026 edition did not introduce major new requirements but reflects the shared responsibilities between DfE and DWP.
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Providers should still review the handbook and confirm that governance, financial controls and board reporting remain aligned with current expectations.
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What Training Providers Should Do Next
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Providers should translate every relevant DfE update into a clear operational action.
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Recommended actions include:
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Identify which 2026 changes affect current contracts and provision.
Review funding rules against every new apprenticeship start.
Update employer-facing funding information.
Check processes for the new £2,000 hiring payment.
Review apprenticeship standards affected by funding withdrawal.
Update ILR processes for new funding models.
Monitor accountability framework indicators throughout the year.
Review governance and financial oversight.
Update Ofsted preparation against the latest toolkit.
Check that policies use current departmental terminology.
Train staff on changes affecting their responsibilities.
Record actions, owners, deadlines and evidence of completion.
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A policy update is not fully implemented simply because it has been circulated to staff.
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Providers should test whether the change has been understood and embedded within actual delivery, data and decision-making.
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Common Risks When Implementing DfE Updates
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Common risks include:
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Continuing to use outdated funding rules
Applying new rules to the wrong learner cohort
Failing to update employer communications
Incorrect co-investment calculations
Outdated levy information
Incorrect ILR funding models
Promoting standards after funding has been withdrawn
Weak evidence of staff communication
Policies that no longer reflect responsibilities
Board reports that omit emerging risks
Treating DfE and DWP requirements as unrelated
Failing to check whether changes have been implemented
Relying on outdated ESFA terminology and guidance
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Skills Office Network’s Funding Assurance Review can independently test funding practices, learner evidence and operational controls before weaknesses lead to audit findings or financial recovery.
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Providers requiring regular cross-functional support can also access 360 Degree Support, including consultancy, ILR management, learner portfolio audits and contract performance reviews.
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Frequently Asked Questions
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What is DfE Update?
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DfE Update is a regular government communication covering further education, skills, funding, data, apprenticeships and actions required from providers.
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What happened to ESFA Update?
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The Education and Skills Funding Agency closed on 31 March 2025. ESFA Update was subsequently renamed DfE Update.
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Is DfE still responsible for apprenticeships?
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Apprenticeship responsibilities are now shared across DfE and DWP. Responsibility for several areas, including the apprenticeship accountability framework, moved to DWP on 1 April 2026.
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What are the main apprenticeship changes in 2026?
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Key changes include Growth and Skills Levy reforms, shorter levy fund expiry, removal of the 10% levy top-up, new co-investment rates, fully funded training for eligible young apprentices, apprenticeship units and a new hiring payment.
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When did the 2026/27 apprenticeship funding rules take effect?
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The 2026/27 rules apply to new apprenticeship starts from 1 August 2026. Providers must continue to apply the appropriate rules to learners who started in earlier funding years.
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What is the new apprenticeship hiring payment?
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From 1 October 2026, eligible non-levy employers can receive up to £2,000 when recruiting a new apprentice aged 16–24, subject to the employment, PAYE and start-date requirements.
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What new ILR funding model applies to apprenticeship units?
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Growth and Skills short-course apprenticeship units are recorded under funding model FM39.
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How should providers respond to a DfE update?
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Providers should identify whether the update affects their provision, assign responsibility, update processes and documents, communicate the change and check that it has been implemented effectively.
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Stay Compliant with the Latest DfE Updates
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The volume and pace of policy change can make it difficult for providers to determine which updates require immediate action.
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Skills Office Network helps training providers turn complex policy changes into practical, compliant processes.
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Our support includes:
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Funding rules implementation
Policy and process reviews
Apprenticeship accountability framework support
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Our specialists can help you identify what has changed, understand the risks and implement proportionate actions across your organisation.
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