The draft apprenticeship funding rules for 2026–27 have now been published, setting out the changes expected to apply from 1 August 2026.
Compared with last year, the mood feels relatively calm. There is no single, sector-shaking change that forces providers to completely rethink delivery overnight. But that doesn’t mean the updates are insignificant, of course!
As ever, the real challenge is not just understanding what the rules say, but turning them into everyday operational practice: enrolment checks, employer conversations, training plans, funding documentation, learner records, progress reviews, English and maths activity, and the evidence needed to show everything has been done properly.
So, what has changed, and what do providers need to do now? Read on for our round-up of some of the key adjustments providers should take into consideration for the 2026 – 2027 academic year.
One of the most visible changes is the move from the apprenticeship levy to the growth and skills levy.
This is more than a name change; the adjustment reflects the government’s wider ambition to create a more flexible skills system, with greater employer choice, more opportunities for young people and stronger alignment with industrial strategy.
For providers, the immediate impact is likely to be limited, but strategically, the direction is clear: apprenticeship delivery is being positioned as part of a broader, more flexible skills landscape.
That matters because this increased flexibility at policy level will create more complexity at provider level – more on this in our recent article: Growth & Skills Levy: More flexibility for employers, more complexity for providers?
Several eligibility changes stand out.
The Level 7 age restriction, introduced in January 2026, is now fully embedded. Level 7 apprenticeships remain eligible only for apprentices aged 16–21, or 22–24 where the apprentice has an EHC plan or has been in care. The transitional language has gone, making this the new baseline.
There is also a new age restriction for the Level 2 Administration Assistant standard. Apprentices starting on this standard will only be eligible if they are aged 16–24 at the start of the apprenticeship.
The Skills Bootcamp exclusion has also been made explicit. Individuals undertaking a government-funded Skills Bootcamp cannot receive apprenticeship funding at the same time.
None of this is particularly complex in isolation, but in practice, such eligibility rules need to be visible for providers at the right point in the process.
If teams are relying on memory, spreadsheets or post-enrolment checks, risk starts to build. Providers need enrolment workflows that flag restrictions early, guide users through the right checks and create a clear evidence trail. This is exactly the kind of operational detail that matters in our sector, and what Bud is built to support you with.
Compliance is not something to ‘bolt on’ to your processes – incorporate it into the learner journey from the beginning.
In the 2026–27 draft rules, levy-paying employers with insufficient funds will see co-investment rise from 5% to 25%. A new co-investment rate is also expected for non-levy employers with apprentices aged 25 and over, although the exact figure is still pending final confirmation.
This is the change most likely to affect employer conversations.
Providers will need to be clear from the outset about when co-investment may apply, what the employer may need to contribute, and how that is reflected in funding documentation. That clarity cannot sit in one person’s head or one finance spreadsheet. It needs to be part of the enrolment journey, the employer agreement process and the information employers see before they commit.
Bud’s view is that this is where connected systems make a real difference.
If learner eligibility, employer status, funding rules, pricing and documentation sit in different places, it becomes much harder to give employers a clear answer and much harder to prove what was agreed. When those workflows are connected, providers can reduce ambiguity, improve employer confidence and avoid painful corrections later.
The draft rules also include a placeholder for a new £2,000 apprenticeship hiring grant for non-levy employers recruiting apprentices aged 16–24 from October 2026. It is expected to be paid in two instalments, with the first triggered after 90 days. Full details are still to be confirmed in the final rules.
For providers working with SMEs, this could become an important employer engagement message. But until the detail is confirmed, it is worth treating this as something to prepare for, rather than something to build campaigns around too aggressively.
A new training plan requirement has been added. The employer, provider and learner must be able to formally sign off that the content of the training plan has been delivered.
This is a practical change, but an important one.
Training plans already sit at the heart of apprenticeship delivery – showing what has been agreed, what the learner needs, what the employer is supporting and how the programme is expected to run.
The new sign-off requirement strengthens the link between the plan and the evidence of delivery. It is not enough to have a document that looked right at the start. Providers need a way to confirm, at the right point, that the planned content has actually been delivered. With Bud, the training plan is a living document – updated continuously throughout the course of the apprenticeship. This new requirement re-iterates the importance of keeping it up to date using a purpose-built solution like Bud.
For many providers, the sensible solution will be a simple, clear gateway or completion-stage sign-off, supported by an auditable statement. The challenge is making that happen consistently without adding another manual step for delivery teams.
This is one of the areas Bud is already reviewing with customers, including how training plan sign-off can be supported in a way that is clear, proportionate and usable in practice.
One welcome change for providers will be the simplification of contracts for services.
In the 2025–26 rules, the contract had to include a detailed price breakdown against five eligible cost headings, agreed at learner level. In the draft 2026–27 rules, the contract can now be agreed at programme level, and there is no longer a requirement to break down the price into eligible cost categories. Learner-level pricing is instead managed through the ILR and apprenticeship service.
That should reduce some administrative burden – but simplification in one place often increases the need for accuracy elsewhere. If the contract no longer carries the same learner-level pricing detail, then the ILR, apprenticeship service and internal funding records become even more important.
Providers need confidence that pricing data is captured correctly, updated when needed and reflected consistently across the places that matter.
The draft rules also provide useful clarification around TNP2 and end-point assessment pricing.
Providers may enter an estimated TNP2 value before a confirmed EPAO price is agreed, but only where that estimate is based on credible source material, such as a current price list. Estimates with no credible basis are not permitted.
There is also a helpful clarification that employers only need to approve a price change where the total price increases. They do not need to approve a rebalancing between TNP1 and TNP2 if the total agreed price stays the same.
Progress review rules are also being tightened.
Previously, providers could agree an alternative review frequency with the employer, provided there was evidence of the reason, but there was no upper limit. Under the draft 2026–27 rules, any alternative timetable must be agreed in advance, not retrospectively, and reviews must be no more than six months apart.
This gives providers flexibility, but not unlimited flexibility. The expectation is that three months is still the norm, and any alternative frequency in reviews is an exception.
The key operational point is that review schedules need to be actively managed. If alternative frequencies are agreed, they need to be recorded in advance, reflected in the delivery plan and visible enough that learners do not drift outside the permitted window.
This is another example of why compliance cannot rely on retrospective checks – providers need early visibility of what is due, what is overdue and where intervention is needed.
The draft rules include several clarifications around English and maths.
Self-directed distance learning is now explicitly prohibited for English and maths delivery, mirroring the off-the-job training rule. Providers must also record accurate start and end dates for English and maths delivery in line with the training plan. If a 19+ apprentice opts into English or maths and later withdraws, the provider must withdraw them to the last day of learning.
The initial assessment level-setting rule has also been clarified: apprentices assessed at Level 2 must start tuition at Level 2.
These are not dramatic changes, but they do raise the bar for visibility and accuracy. Providers need clear records of English and maths decisions, start and end dates, learner status, delivery activity and alignment with the training plan.
Without that visibility, small inconsistencies can become bigger compliance issues.
Additional flexibility has also been introduced for 19+ learners to use the Adult Skills Fund to claim statutory entitlement to study English and/or maths up to level 2, where their employer does not agree that English and/or maths should be delivered as part of their apprenticeship.
There are a few smaller updates that are still worth paying attention to.
Where an apprentice has a stable learning support need due to a permanent disability, the three-monthly review can now be light-touch rather than a full review. This is a helpful clarification and should reduce unnecessary duplication where the support need is unlikely to change.
Non-mandatory qualifications must not be at a higher level than the apprenticeship standard. For example, a Level 7 qualification cannot be used to deliver a Level 6 standard. This closes a potential compliance gap, preventing providers from bypassing the defunding of Level 7 apprenticeships by adding Level 7 qualifications to Level 6 apprenticeships.
Finally, provider obligations around the care leavers’ bursary have been strengthened. Providers are expected to tell eligible apprentices about the amount, payment schedule, tax-free status, Universal Credit impact, confidentiality around care experience, and support available to obtain evidence from the local authority.
Again, the theme is consistency. Providers need to know that the right information is being shared, captured and evidenced at the right time.
The final 2026–27 rules, due to be released later this month, could still bring further changes – particularly around co-investment rates and the new hiring grant.
But providers don’t need to wait before preparing; the priority areas are already clear:
Review enrolment checks for age-restricted standards and Skills Bootcamp exclusions.
Strengthen employer-facing wording around co-investment.
Decide how training plan delivery sign-off will be captured.
Check English and maths start and end date processes.
Make sure alternative progress review schedules cannot exceed six months.
And review how pricing, funding documentation, ILR data and apprenticeship service records stay aligned.
None of this should cause any panic; it’s simply a reminder of how important it is to be in control.
Bud is designed to translate funding rules into clear, connected workflows and enable provider teams to do the right things for funding compliance as part of their everyday delivery.
Our platform connects the learner journey from enrolment through to completion, helping providers to manage eligibility, funding, training plans, progress, evidence and compliance in one place. As funding rules evolve, that connected foundation becomes increasingly important.
Bud is currently working on preparing the necessary platform updates to ensure providers can remain compliant with the new funding rules easily and smoothly. For more details on this, check out the Bud Knowledge Base, keep an eye out for our upcoming 26-27 Funding Rules webinar, or speak to your Customer Success Manager.