Skills policy updates - June 2025

Welcome to the Enginuity Policy Team’s policy update for June.

Comprehensive Spending Review Summary

Our Chief Executive Officer, Ann Watson, shares her reaction to the 11 June 2025 Spending Review:

"Today’s Spending Review sends a welcome signal of government support for the UK's priority industrial sectors, with significant investment announced for clean energy, defence and transport. This increase in capital investment will help create demand across the UK’s industrial supply chains, providing SMEs with a confidence boost to realise the Government’s ambitious economic and decarbonisation goals. With fiscal parameters now in place, the crucial next step is a comprehensive Industrial Strategy that provides clarity, detail and meaningful policies to set a concrete vision for the future of UK industry. 

Enginuity is also pleased to see the Chancellor acknowledge that achieving growth requires investment in skills, with an injection of £1.2 billion of additional investment per year by 2028-29 into the skills system. Its impact will depend on allocation and execution and will no doubt hinge on further details due to be announced in the forthcoming post-16 strategy". 

Explore our full summary of the Comprehensive Spending Review below.

Comprehensive Spending Review summary

UK and England policy

Immigration White Paper published

The Government published its long-awaited immigration white paper, Restoring control over the immigration system, which aims to reduce overall migration and strengthen the UK's border controls. Proposals in the paper are to tighten immigration for lower-skilled workers, whilst seeking to enable opportunities for higher-skilled talent. To attract highly skilled workers to the UK, the Paper seeks to increase opportunities and applications to existing high-talent routes such as the Global Talent Visa – particularly for its targeted strategic industries.

Level 7 apprenticeship funding to be cut from 2026

Government confirmed that public funding for level 7 apprenticeships will be removed for people aged 22 and older from January 2026. From this date, employers will only be able to use the apprenticeship levy to fund the Master’s level courses for existing apprentices and new starters up to age 22. The Department for Education said the reforms “rebalance” the apprenticeship budget “towards training at lower levels, where it can have the greatest impact”. Secretary of State Bridget Phillipson said removing public funding for level 7 apprenticeships is “unlikely” to lead to a “significant fall” in the supply of skills in the future.

New apprenticeship funding guidance published

The Government updated its apprenticeship funding guidance, with changes due to take place from August 2025. Key changes include: a move to a more “centre” based model of delivery assessment, specification of hours for off the job training, reduction of the minimum duration from 12 to 8 months, changes to Maths and English requirements, introduction of foundation apprenticeships and the first standards published, changes to end-point assessment (now called apprenticeship assessment). 

National funding rate to increase for 16-19 year old students

The national funding rate for 16- to 19-year-old students will be raised to £5,105 in the next academic year. T-Level funding rates, which were expected to fall following the DfE’s decision to reduce a 10% uplift to 5%, will be raised. English and maths funding for resit students will also be boosted. Programme cost weightings for higher cost courses have been increased to “boost capacity in priority sector subjects such as construction, manufacturing and digital which are vital to economic growth”.

First seven foundation apprenticeships have been released

Skills England has published a list of the first seven foundation apprenticeships, which all have a typical duration time of eight months and their funding bands range from £3,000 to £4,500. Each foundation apprenticeship “provides a mix of employability skills and behaviours, technical knowledge and skills, and associated English and maths”. Typical progression routes will “likely include employment or progression onto another skills product such as a level 2 or level 3 apprenticeship. Employers who take on a foundation apprentice will qualify for up to £2,000 per foundation apprentice, subject to retention and progression.

DfE’s budget for apprenticeships has risen to more than £3 billion

New Treasury documents for 2025-26, known as ‘main supply estimates’, show that ministers have increased England’s apprenticeship budget for this year by 13 per cent, from £2.73 billion to £3.075 billion. The increase is the largest in cash terms since the apprenticeship levy’s introduction in 2017. The Office for Budgetary Responsibility has estimated that total apprenticeship levy paid by businesses in 2025-26 will be £4.2 billion, which leaves a top slice of around £600 million once the DfE’s new budget is released and devolved nations are paid their share.

Devolved Administrations

Scottish Government published its Programme for Government

The Scottish First Minister published the Programme for Government which is focused on four priorities – eradicating child poverty, growing the economy, investing in public services and tackling the climate emergency. This programme has been brought forward from its expected publication date post-summer to enable a full year of delivery before the 2026 Scottish Parliament election.

Scottish apprenticeship achievement rate hits record high

Skills Development Scotland has published statistics showing the Modern Apprenticeship achievement rate is at the highest level recorded at 79.8% for 2024-25. Over a third of starts in the last year were in Construction, Engineering, Energy and related occupations - and 84% of starts were at a higher level of SCQF level 6 or above. 25,507 new start apprentices were supported in the last year.

Medr launches consultation on new system to regulate FE

Medr, the Commission for Tertiary Education and Research in Wales, has launched a consultation on a new system for regulating tertiary education and training providers. The consultation sets out proposals for regulating in a way that is transparent, proportionate and risk-based, and seeks views on the regulatory framework – including some conditions of regulation and funding – powers of intervention, and the quality framework. The deadline for responses is 18 July.