New research shows that changes to funding for Level 7 apprenticeships could cost UK employers – many from the construction industry – around £214m in additional training costs.
The government’s decision to cut levy funding for Level 7 apprentices aged over 21 will come into effect from January 2026.
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The data from UVAC reveals that year-on-year Level 7 apprenticeship starts have risen by 13% in the last three years, and 5% in the last 12 months.
In addition, the National Foundation for Educational Research previously found that 90% of roles within firms across all sectors will require higher-level skills by 2035, highlighting how employers are increasingly dependent on degree apprenticeships at Levels 6 and 7.
Mandy Crawford-Lee, chief executive for UVAC, said: “The government’s policy to remove vital levy funding – that is supporting nine in 10 Level 7 apprentices – is a major blow to construction employers and will leave them facing both huge training bill costs and a skills shortage headache.
“This funding black hole is at a time when Level 7 apprenticeships have been growing in popularity year-on-year and are critical to driving wider economic growth.
"They’re also proven to enhance social mobility – giving individuals from underserved communities a clear career pathway, access to higher education and the skills to achieve their full earning potential in senior-level positions.
“This new policy ultimately feels like a contradiction to Labour’s industrial strategy, where it insists there will be ‘no glass ceiling on the ambitions of young people in Britain’.”
'Disappointing' policy
Crawford-Lee added that removing funding for Level 7 apprentices aged over 21 “indicates to us that the government is unfortunately not looking to prioritise the career and skills progression of employees at every stage of their working life”.
“It’s disappointing that the government places such little emphasis on the link between skills and productivity,” she said.
“We simply don’t believe that reducing Level 7 funding eligibility will make lower-level apprenticeships more attractive to construction employers – or, more importantly, reduce the number of young people not in employment, education or training (NEETs).
“It would seem that tackling NEETs is now the government’s policy priority at the expense of developing the skills provision needed for a highly skilled, world-beating economy.”
