Welcome to the Enginuity Policy Team’s policy update for January 2026. Our monthly update is designed to keep you informed about key developments in skills policy. This edition shares insights into recent government announcements and their implications for our sector, helping you stay ahead of changes shaping the skills landscape.

UK and England                                             

The Work & Pensions Parliamentary Select Committee opened an inquiry into young people who are NEET

The Committee have said this is intended to complement the government inquiry being led by Milburn. This is therefore a separate inquiry to the call for evidence opened in December by government, closing on the 30th Jan, although the questions are very similar. The government call for evidence closes on the 12th February. Enginuity is responding to both of these consultations. 

CEO of Ofqual Sir Ian Bauckham was questioned by the Select Committee for education

Bauckham said he agreed with the Committee’s “strong views about the treadmill of resits” in colleges, and said he is working “intensively” with the Department for Education on promised new level 1 “stepping stone” qualifications for students struggling with English and maths but could not give a date for when they could arrive in schools and colleges. On V-levels, Bauckham suggested proposals “speak to” the priority stated by the Committee on the maintenance of middle routes such as AGQs. Michael Hanton, Deputy Chief Regulator of Ofqual, was also questioned and confirmed further consultation on V levels and occupational certificates will occur in the spring.

Defence Secretary John Healey announced a £453 million investment to fit RAF Typhoon fighter jets with “cutting-edge” radar systems, securing up to 1,300 U.K. jobs

Healey confirmed the deal during a visit to Leonardo UK’s site in Edinburgh. Under the contract, BAE Systems, Leonardo UK and Parker Meggitt will deliver new radar capability for RAF Typhoons over the coming years. The work will sustain around 300 highly skilled jobs in Scotland, alongside 120 roles in Lancashire and more than 100 in Luton. Across the wider supply chain, the Typhoon programme supports more than 20,000 jobs at 330 companies nationwide.

Ofqual has launched a consultation proposing that awarding organisations should once again be required to have their T Level technical qualifications accredited by Ofqual, reversing reforms made by the previous government

The exams regulator has launched a consultation on proposals to reintroduce an accreditation requirement for technical qualifications within T Levels, arguing the move would help strengthen the “long-term credibility” of the flagship technical courses. If approved, it would mean TQs taught from September 2028 must meet Ofqual’s accreditation standards, giving the regulator the power to block qualifications that do not meet those standards.

The Institute for Fiscal Studies published its annual report on education spending in England in 2025-26

Key takeaways below:

• Rise in student numbers and inflation have limited the extent to which additional funding has translated into increases in funding per student.
• Overall adult education spending has declined, but apprenticeship spending is rising.
• Classroom-based adult learning has seen a steep decline in participation and spending.

The Ministry of Defence launched a new team to back British small businesses

A new team dedicated to supporting small British businesses to win more defence contracts was established by the Defence Readiness and Industry Minister, Luke Pollard MP, on a visit to the National Manufacturing Institute Scotland.

New study by NFER shows disadvantaged apprentices are more likely to drop out

New research from the National Foundation for Educational Research (NFER) revealed apprentices who withdraw face lasting consequences and “wage penalties” compared to their peers who complete. The report analysed apprenticeship dropouts between 2014-15 and 2019-20.

Ministers have published a new cross-department “International Education Strategy”

The strategy aims to grow the value of education exports from the current level of £32.3 billion a year to £40 billion a year by 2030. It is a joint commitment across government, co-owned by the DfE, the Department for Business and Trade, and the Foreign, Commonwealth and Development Office.

The Transport Select Committee published a report titled: “Engine for growth: securing skills for transport manufacturing”

Here are some key recommendations made by the report:

• The Government should extend the expiry window for unspent levy funding to three years and set out options for passing down levy funding to SMEs.
• The Government should reintroduce levy funding for level 7 apprenticeships for all ages within the eight growth-driving sectors.
• Skills England should ensure apprenticeship and technical education standards are revised and updated at least every three years involving manufacturers.
• Skills England should set out an evidenced plan to support the Government’s target to increase diversity, as well as supporting SMEs with shared diversity toolkits.
• Skills England should review support for modular or part‑time apprenticeships and other training options for candidates with caring responsibilities or returning from career breaks.

The Department for Science, Innovation and Technology announced an expansion of the free AI foundations training to upskill 10m workers by 2030

Every adult in the UK will be eligible to take free, newly benchmarked course to gain AI skills for work.

The DfE revised the approach to Ofsted grades in the apprenticeship accountability framework

Apprenticeship providers will come under scrutiny from the DfE if they score the bottom two ratings in Ofsted’s inspection reports, refreshed rules have revealed. Three “supplementary indicators” – breaks in learning, end-point assessment organisation data, off-the-job training – have also been suspended.

 Scotland

The Local Growth Fund was launched, in which five Scottish regions are to receive a share of a new £140 million UK Government Fund

The programme will fund regional projects which will drive economic growth. That might mean projects like infrastructure investment, business support, or skills development.

Scottish Government published its draft budget which included an increase in college funding, a reduction for funding for Skills Development Scotland, and significant investments for decarbonisation

Here are some key points.

• The draft Budget raises two lower income tax thresholds above inflation while targeting £1.5 billion in efficiency savings, including a significant real‑terms funding cut for local government.
• Colleges receive a 10% funding increase, but Skills Development Scotland faces a slight reduction and Modern Apprenticeship funding rates remain frozen despite rising delivery costs.
• The government commits £5 billion to climate‑positive investment.
• Business groups have criticised the Budget for widening tax divergence with the rest of the UK and failing to shield SMEs from business‑rates pressures.
• Additional documents published alongside the Budget outline long‑term infrastructure plans. 

Scottish Parliament passed the Tertiary Education Bill

This paves the way for apprenticeship governance and funding to move from Skills Development Scotland to the Scottish Funding Council. See attached for analysis of the final debate and vote shared with me by Skills Development Scotland. Scottish ministers will now also be obliged to prepare a national funding strategy, specifying needs, priorities and outcomes for different aspects of the tertiary system.

Wales

Welsh Government published its final Budget 

Here are some key points:

• All government departments will receive additional funding to address inflation and pay pressures, including £112.8m extra for local government and £116m of business support over two years.
• £120m in capital funding will be reserved for major investment projects for the next government following the Senedd election.
• In skills and education, new allocations include £5m for apprenticeships and £1m for Jobs Growth Wales Plus. 

Welsh Government launched a new consultation on The future of tertiary education in Wales: five challenges and calls for submission

This is a call for evidence on the future of tertiary education in Wales and the key challenges facing the system. The Consultation closes on 27th March. Enginuity will be responding to this consultation.

The Senedd events team will be offering low-cost events for the new Parliament post May's election, in anticipation of Senedd reforms that will be implemented at the next election

The number of Members of the Senedd (MSs) will increase by 60% from 60 to 96 for the 2026 election, aiming to improve scrutiny capacity. The reform will also introduce a closed-list proportional representation system, reducing constituencies from 40 to 16, with each electing six members. Enginuity will be inquiring to offer support for this.

Consultations & Inquiries

• Select Committee: Youth employment, education and training – closes 12 February 2026
• DWP: Connect to Work statistics: publication proposals – closes 16 February 2026
• Ofqual: Accreditation of TQs within T levels and other updates – closes 4 March 2026
• Welsh Gov: The future of tertiary education in Wales: five challenges and calls for submission closes 27 March 2026

Decision maker changes

• DWP appointed Praful Nargund as a skills policy adviser to focus on maximising the impact of adult skills policy in England; the part-time unpaid appointment starts in January 2026 and will last for 6 months, with the option to extend.
• Sinead O’Sullivan will temporarily take on Director for Skills role at DfE, as Julia Kinniburgh leaves the role to be interim director of schools and SEND reform.
• Jonathan Childs has been appointed Ofsted's new Deputy Director of Post-16 Education, Training and Skills, starting March 2026.
• Ruth Binks has been appointed new Chief Inspector of Education for Scotland, starting in March.
• New members were appointed to the Industrial Strategy Advisory Council – Keith Anderson, Amelia Gould and Dana Strong.

What’s coming up in February

• W&P SC inquiry on NEETS
• National Apprenticeship Week
• International Day of Women and Girls in Science
• Government due to respond to the ESNZ Committee report on Workforce Planning for net zero, that Enginuity’s evidence was cited in
• Enginuity and SQW to hold roundtable on the skills gap

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