Skills policy updates - September 2025

Welcome to the Enginuity Policy Team’s policy update for September 2025. 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 policy

Labour Party Conference 

The annual Labour Party Conference took place in Liverpool from Sunday, 28 September to Wednesday, 1 October. Apprenticeships and skills were high on the agenda, and our team shared their thoughts on the key discussions impacting the sector: 

Ann Watson, CEO of Enginuity, said: "The success of the United Kingdom has been built on the skills, talent and ingenuity of its people.  It was heartening to see today the Prime Minister put skills central to economic recovery and productivity.

"We particularly welcomed the removal of the 50% university target which will focus on the skills someone has gained not the journey taken to attain them.  It is a very positive step forward in recognising that both University and Vocational Education are equally valid routes to gaining knowledge and skills.

"With SMEs at the heart of what Enginuity does the sustained funding and support for SMEs to access apprenticeships including help with non-training costs and release time for staff to mentor apprentices will be welcomed by the 99% of small and medium sized enterprises within the manufacturing sector."

Nicola Dolan, Associate Director ‑ Charity Operations and Impact, added: "We welcome the Prime Minister’s clear and meaningful commitment to skills and apprenticeships in today’s speech. The pledge to create 14 new Technical Excellence Colleges and invest £800 million into 16–19 education represents a bold step towards rebalancing the education system and placing technical routes on an equal footing with academic ones.

"As a charity working closely with employers — particularly SMEs — we see first-hand the urgent need to close skills gaps and raise productivity across sectors. Today’s announcements send a strong signal that the government understands the central role skills must play in economic growth. To turn this ambition into impact, support for SMEs must be front and centre — including help to navigate the system, engage with schools, and take on apprentices. We look forward to working with government and industry to ensure this renewed focus delivers for young people, employers, and the wider economy."

Skills moved into Department for Work and Pensions 

Prime Minister Keir Starmer announced that training, adult further education, careers, apprenticeships and Skills England have all moved to the Department for Work and Pensions. Responsibility for higher education, and further education, skills, training and careers for those “aged 19 years and under” will remain at Department for Education (DfE). Smith described moving skills policy to Department for Work and Pensions (DWP) as a “logical next step” because she is “really determined that we bring skills work out of the DfE across the whole of government.” Pat McFadden has said he will seek to use his new powers over skills policy to curb “wasted potential” from youth unemployment and cut the government’s growing benefits bill. 

Funding allocations for T Levels will be lagged from 2027 

Guidance published this week says allocations for colleges and schools will be based “solely on student numbers from the start of the previous year”, meaning the estimated student numbers will end, but in-year reconciliation will continue. The current registration process for new T Level providers will also be scrapped.

Difficulties with new apprenticeship app show 

The government’s flagship Your Apprenticeship app has been criticised for technical issues and a lack of functionality as a probe using freedom of information laws showed only 7 per cent of apprentices had signed up. 

Parliamentary Committee calls for statutory pay review body for colleges 

The education select committee concluded their inquiry into the future of FE and skills, with a report of over 40 recommendations, including devolution of 16-19 education to strategic authorities, reinstatement of funding for some level 7 apprenticeships and modular T Levels. MPs warned the government not to lose sight of the “diverse motivations of adult learners” including “social inclusion and lifelong learning” as policy responsibility for adult education transfers from the DfE to the DWP. 

MPs criticise jobcentre and careers merger

MPs on the work and pensions select committee have criticised an “absence of information” about a planned merger of the National Careers Service with Jobcentres, almost a year after plans to reform the government services were first announced. MPs called for a more “ambitious and energetic approach” to the merger, after the DWP only provided “an outline sketch” of its plans. The committee warned that the merger risks being “little more than a rebranding exercise” if the DWP fails to resolve issues such as contract changes for NCS staff, accountability structures and devolution arrangements. 

Devolved Administrations

Wales launches consultation on new apprenticeship programme 

Medr, Wales’ new Commission for Tertiary Education and Research, has launched a consultation to help to shape the design of the new Welsh Apprenticeship Programme, which is due to start on 1 August 2027. The consultation seeks views on the high-level principles to guide the new apprenticeship programme, the definition of an apprenticeship, employer engagement, apprenticeship sector frameworks and economic responsiveness of the programme. 

New Scottish Skills Minister  

Ben Macpherson was appointed Minister Designate for Higher and Further Education, replacing Graeme Dey, who was appointed Scotland's Minister for Parliamentary Business following the resignation of Jamie Hepburn.

Scottish Budget pushed to January over Autumn Statement scheduling 

Scotland’s Budget for 2026-27 is set to be delayed until 15 January, a move Finance Secretary Shona Robison has described as “unavoidable” due to the late scheduling of the UK Government’s Autumn Statement.