Skills policy updates - March 2026

Welcome to the Enginuity Policy Team’s policy update for March 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           

Enginuity launched its SME Snapshot Survey results

The 2026 SME Snapshot Report captures the experiences of over 250 SMEs, representing more than 10,000 employees and £1.91 billion in revenue. This edition, alongside our 2025 SME Snapshot Report, enables trend analysis, helping us understand the real pressures on skills, costs, and growth and showing how policy reforms and economic pressures are affecting SMEs over time.

Government published its Spring Statement.

The Chancellor announced that “in the coming weeks” she will set out additional reforms to give young people more support and opportunities. 

DWP’s head of funding delivery Tracey Cox outlined multiple rule change proposals that could come in from 2026-27 during a workshop on day two of this week’s Apprenticeship and Training Conference.

• A rule that blocks apprentices from accessing their legal entitlement to English and maths training will be changed.
• Officials are also considering amendments to apprenticeship funding rules covering visas, workers employed across UK borders, subcontracting, co-investment collection for completion payments and additional learning support reimbursements.

Make UK published a report on UK Manufacturing and Industry. 

The report highlighted that more than £1 billion raised from businesses through skills levies remains unused, despite widespread labour shortages across industry. Make UK is calling on the Treasury to release these funds to support employer investment in training, which could help deliver over 235,000 new apprenticeship starts.

Government published its response to the post-16 level 3 and below pathways consultation, comprising the following updates:

• Government revealed the first V Levels subjects as part of landmark reforms. Ahead of its full response to a public consultation on reforming the post-16 qualification landscape, the DfE has revealed that V Levels will be taught in digital, education and early years, and finance and accounting from September 2027.
• DfE agreed to a BTECs defunding delay. Popular BTECs and other applied general qualifications have been granted another funding extension as part of a “sustainable” transition to new V Levels, the government has announced. Ministers have agreed to extend funding for all level 3 diplomas and extended diplomas into 2026-27, giving colleges and sixth forms a significant reprieve with just six months to go before the start of the new academic year.
• Government confirmed plans for eight new T Levels, with content and assessment trimmed to ease delivery pressures. The minimum 315-hour industry placement will remain, but classroom hours will be reduced, with the technical qualification cap reducing by 100 guided learning hours. Alongside the hours cap on new courses, the DfE said it will continue reducing the size of existing T Levels where content and complexity are deemed unnecessary.
• By June 2026, the government will publish an Implementation Plan setting out the subject lists for the phased rollout, the updated approach to T Level development and delivery, assessment and grading arrangements, non-qualification‑ activities, and further details on transition.
• Government confirmed the national funding rate for 16 and 17 year old learners will only rise by 0.5 per cent in academic year 2026-27, marking the lowest increase since funding rates were frozen in 2021-22.

College leaders have accused Ministers of breaking a promise for a real-terms funding increase for 16 to 19 year olds made in last year’s white paper to ease demographic pressures. 

In a speech at the ASCL conference, Bridget Phillipson told FE Week that colleges can expect more details on this funding “in due course”. 

The government published data on T level entrants for 2025/26, showing a drop in numbers at Foundation level but a rise for T levels generally.

Education and Early Years, Health and Science, and Engineering and Manufacturing were the most popular options. The entry figure of 27,445 failed to meet DfE’s expected 33,400 starts, meaning recruitment targets for T-Levels have been missed for the sixth consecutive year since their rollout in 2020, as highlighted by FE Week.

Government announced a new Youth Deal to boost employment and skills opportunities for young people, backed by an additional £1bn investment. Key measures include:

• Youth Jobs Grant: employers hiring 18 to 24 year old Universal Credit claimants who have been seeking work for six months will receive a £3,000 incentive.  
• SMEs will receive a £2,000 incentive for each new apprentice aged 16–24, while reforms to apprenticeships will prioritise opportunities for young apprentices and school and college leavers 
• Expansion of eligibility for the Jobs Guarantee Scheme (from 18–21 to 18–24), delivering fully-funded six‑month paid job opportunities. All eligible young people will have access to a six‑month, fully funded placement. Pilot rollout begins April 2026 across several regions, with full national rollout in Autumn 2026. 
• Applicants for Phase 1 of the Jobs Guarantee Scheme, were able to apply for funding between the 29th January and 28th February 2026. Successful participants will be notified by April 2026.
• New foundation apprenticeships in hospitality and retail and new apprenticeship units aligned to industrial priorities were announced.
• Launch of the first 7 apprenticeship units, which are aligned to the government’s industrial strategy priorities. A limited group of “strong” apprenticeship provider will be eligible to deliver the first apprenticeship units when they launch in April. Each unit will last between one and 16 weeks, to be taken by employed people aged 19 and over.  An additional Battery Manufacturing Apprenticeship Unit was announced on the 23rd March 2026.
• Government announced the defunding of sixteen apprenticeships, including Team Leader (Level 3), Operations Manager (Level 5) and Chartered Manager (Level 6) apprenticeships. Defunding will kick in immediately for providers that do not currently deliver the standards being axed.

Government published the Low Pay Commission Remit 2026, establishing the following: 

• National Living Wage (NLW): Moving away from a floor of two-thirds to a symmetrical target (or “reference” point).
• 18-20 National Minimum Wage (NMW): The remit states that the “LPC has full flexibility to determine the pace and ultimate timing” of the alignment of the 18-20 NMW and NLW rates and asks that the LPC prioritises the employment prospects of younger workers when making their recommendation for the 18-20 NMW. 
• 16-17 and Apprentice NMW: The remit asks that the NMW rates are “set at a level which supports the employment prospects for each group”. 

Rachel Reeves set out the next phase of the government’s growth plan, which includes: 

• City Investment Funds: £2.3 billion to be deployed by mayors in the largest city regions, focused in the North and Midlands. £1.7 billion of this will be focused on boosting the region’s industrial strengths.
• IS-8 cluster partnerships programme: backing five areas in the north, including through £150 million clusters investment from the British Business Bank, supercharging growth driving sectors where they already excel. 
• £10 million to back “Team Derby” - a partnership led by the Mayor of the East Midlands bringing together local, regional and central government, industry and academia - to accelerate growth in Derby.

Government published new statistics on Apprenticeship starts, achievements and participation.

FE Week highlighted that young people’s share of new apprenticeship starts plunged to the lowest level in five years during the first half of 2025-26. Starts on level 7 apprenticeships rose to 345 per cent in the final two months before funding was switched off for people aged over 21 – amounting to nearly 10,000 more than the previous year. The national apprenticeship achievement rate rose to 65.4 per cent for the 2024-25 academic year, just missing the government’s longstanding target.

Scotland

Scottish government announced £10 million investment to support the creation of new jobs and skills development in Grangemouth.

Further investment into Celtic Renewables will support the company’s expansion into largescale commercial production‑ of sustainable biochemical solutions, aiming to create 149 new jobs in the area by 2030.

The Scottish Government’s expanded Just Transition Fund reopened, unlocking £17 million for green jobs. 

The fund will include up to £10 million for large‑scale commercial projects focused on jobs, skills and economic transition; up to £3 million capital and £1 million resource for community and social enterprise projects; and up to £3 million to support small and medium enterprises in the oil and gas supply chain diversifying into low‑carbon markets.

The Scottish Government announced that a review of publicly-funded contribution rates for modern apprenticeships will begin later this month. 

Stage one of the review will focus on gathering evidence and reviewing the data and is expected to be completed in September this year. Stage two will be a more in-depth consideration of the costs of delivery. This will be concluded in 2028.

Wales

Welsh Secretary Jo Stevens and Employment Minister Diana Johnson announced the opening of new Connect to Work centres in Wales.

16 more areas across England and Wales have had their funding confirmed as part of a £300 million expansion, aiming to bring employment support to over 75,000 more people facing complex barriers to work.

Medr published learner outcome measures for apprenticeships and adult community learning, August 2024 to July 2025. 

The success rate of apprenticeships increased by 2% in 2024/2025, but the only sectors to see the success rate fall were construction and engineering. The success rate for older age groups increased, whereas the success rate for younger age groups stagnated.  

Northern Ireland

The Northern Ireland Affairs Committee published a report on Economic Growth in Northern Ireland, calling for greater support for SMEs and a commitment to investment in skills and infrastructure.
 
The report warns that, with responsibility for economic development devolved to the NI Executive, a multiplicity of central and devolved government missions and strategies is failing to provide clarity for businesses on the overall economic strategy. Multiple bodies providing support in different ways may be confusing SMEs. Government should therefore establish a completely overarching “one-stop shop” for SMEs to help them invest and grow.

Consultations & Inquiries

• DfE: 16 to 19 level 1 English and maths qualifications. Closes 2nd June 2026. 
• Ofqual: Introducing new Criteria for Recognition to secure the safe and timely delivery of 3 new types of qualification for post-16 students. Closes 23rd April 2026.
• DWP: Industry Training Board Reform. Closes 14th June 2026.

Decision maker changes

• Ministers announced the appointment of nine Board Members as the inaugural Fair Work Agency Advisory Board. The Advisory Board has an equal number of members with independent, employer and trade union backgrounds.
• Donna McMaster appointed as the CEO of Education Scotland.
• Ruth Hannant and Polly Payne appointed joint CEOs of Office for Students.

What’s coming up in April

• Following the release of the 2026 SME Snapshot Survey results, Enginuity's Policy Team will initiate conversations with government about finding solutions to these challenges.
• Enginuity will produce a follow-up paper off the back of the SME roundtable and Webinar to bring nuance to and optimise the data in snapshot.
• Enginuity will attend the CBM Annual Dinner and Awards, as well as the CBI Government Affairs Network.
• The National Living Wage for workers age 21 and over will raise from £21.21/hour to £12.71/hour.
• The Scottish Modern Apprenticeship rate review will begin.
• Details from Skills England on how the new apprenticeship units will be funded and delivered will be due for release.

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