Government ends Level 7 apprentice funding

Sara White, Editor, Business & Accountancy Daily

In a shift towards prioritising construction and care worker apprenticeships, funding will no longer be available for advanced Level 7 apprenticeships.

This means that funding for many apprenticeships for accountants and tax roles will no longer be supported unless they are aged under 21 from January 2026.

The government has set a £3bn apprenticeship budget but has changed training priorities towards more practical apprenticeships to fill urgent skills gaps.

Confirming the switch to a younger target audience for apprentices, the government said it was ‘refocusing funding away from Level 7 (masters-level) apprenticeships from January 2026, while maintaining support for those aged 16-21 and existing apprentices.

‘This will enable levy funding to be rebalanced towards training at lower levels, where it can have the greatest impact.’ 

The decision to stop Level 7 funding has been criticised by some in the accountancy profession, which has rapidly increased the number of apprenticeship starts in the last five years. However, it is important to note that the majority of these apprentices are school leavers, not over 21s.

In 2023, there were 8,764 apprentices at the top six firms alone - Big Four plus BDO and Grant Thornton, an increase of more than 1,000 on the previous year.

Overall, there were nearly 13,500 apprentices training across the leading accountancy firms showed the Business & Accountancy Daily Top 75 Trainees Firms survey in 2024, a 10% increase in a single year. This can in part be explained by the desire of many school leavers not to incur additional debt through taking out student loans to go to university, instead opting to head straight into the profession.

Vipul Sheth, managing director of Advancetrack said: ‘It’s great to see the continued support for people wanting to train as accountants who are under 21, however the government’s decision to scrap funding for those over 21 is deeply troubling.

‘This policy risks shutting the door on a vast pool of talented individuals – including career changers and older learners, at a time when our sector faces an acute talent crisis.

‘Accounting is not just a career for school leavers; many of our most promising apprentices begin training later in life, bringing valuable experience and diversity of thought into firms. I’m concerned this is going to significantly reduce access to apprentices for the smaller practices up and down the country, that rely on government support to invest in their teams.’

Level 7 apprenticeships are seen as a major access gateway for accountants, particularly those working in business and smaller firms.

Glenn Collins, head of policy at ACCA said: ‘The government has failed to take account of the far-reaching implications the announcement will have on key sectors that drive growth. The 21 year old limit is disappointing news for the accountancy sector – the idea that all learners know by 21 what their future career should be is not realistic. 

'ACCA’s data tells us that learners aged 21 and under at the start of their programme are just 12% of L7 ACCA apprentices, but around half of apprentices are aged 24 and under. For learners aged 24 and under, 64% start their ACCA Apprenticeship with no prior higher education qualification.

‘We are concerned about potential negative impacts on social mobility into the profession from these changes, and about the proportionally larger impact the changes will have within the public sector and across small and medium sized practices where traditionally they struggle to recruit and train younger accountants.’

But there are calls for reform of Level 7 funding, which represents a small proportion of apprenticeships, rather than scrapping them.

Lizzie Crowley, senior skills adviser at the CIPD, the professional body for HR and people development, said: ‘The decision to restrict government funding for all Level 7 apprenticeships to those aged 16 to 21 is unlikely to meaningfully boost youth participation given that fewer than one in 10 apprentices who train at this level fall within this age bracket. 

‘While the aim of rebalancing the system towards young people is important, this blunt approach risks undermining the breadth and ambition of the apprenticeship offer.

‘We have previously argued for a more nuanced approach to managing the cost of delivering higher-level apprenticeships, for instance via reduced subsidies for older apprentices.’

The announcement does not change fundamentally the Apprenticeship Levy which is seen as a major problem.

Neil Carberry, chief executive of the Recruitment and Employment Confederation (REC) said: ‘The changes announced do not progress us on the real challenge that has driven down apprenticeship opportunities for young workers which is the poor design of the apprenticeship levy.

‘Fixing the levy with real progress on a new Growth and Skills levy is a big task but offers a big reward for people and employers. Firms are increasingly frustrated by the lack of progress on this. 

‘A greater embrace of shorter, modular courses and collaboration with employers is the way to maximise the talent in this country, and is essential for industries from healthcare to construction.’

The announcement followed a dramatic fall in the number of apprenticeship starts over the last decade, and as recent ONS figures showing that the number of NEETs has soared, with one in eight 16-24 year olds not in employment, education or training.