At a glance

The six 2026 changes every employer should know

SEP 2026

16 standards defunded

Including Team Leader L3, Operations Manager L5 and Coaching Professional L5. New cohorts on defunded standards from September 2026 are not eligible for levy funding.

2026/27

Growth & Skills Levy

The successor to the Apprenticeship Levy. More flexibility to fund short courses and non-apprenticeship training alongside apprenticeships.

APR 2026

SME co-investment → 0% for under-25s

Full funding for SMEs taking on apprentices under 25. The last financial barrier to AI apprenticeships for smaller employers is gone.

LIVE

AI & Automation Practitioner L4

ST1512, £18,000 band, 15 months, no coding. The fastest-growing standard in the UK. TESS bundles up to 5 accredited qualifications — no competitor matches that.

ONGOING

Off-the-job stays at 6 hours/week

The 6-hour minimum is a funding rule, not a guideline. Compliance failures can trigger funding clawback. Build it into the line manager's calendar from day one.

ROLLING

24-month levy expiry

Funds dropped into the digital account expire 24 months later. Use it or lose it. Set a quarterly finance alert — we see mid-sized employers lose £40k-£120k/year to expiry.

16 standards being defunded

Here's what's being withdrawn, why, and what replaces it.

From 1 September 2026, 16 apprenticeship standards will lose levy funding. The most widely-used programmes affected are Team Leader Level 3, Operations Manager Level 5, and Coaching Professional Level 5 — between them accounting for tens of thousands of active apprentices across the UK.

Anyone enrolled on a defunded standard before September 2026 can normally continue to completion. New cohorts on these standards after the cut-off date are not eligible for levy funding. Employers planning cohort starts in summer 2026 with the intention of re-enrolling in October should rethink — once a standard is withdrawn, new enrolments stop.

Why this matters for you If your 2026 L&D plan includes Team Leader L3 or Operations Manager L5, you need a Plan B. For Team Leader L3, TESS's Data-Driven Team Leader L3 (ST0795) is the direct replacement — same funding band, same leadership core, updated for modern data and AI skills. For operations leadership, the AI for Operations Leaders L4 is a future-proofed alternative.

Read more

The complete defunding listEvery standard affected, every replacement option. Leadership apprenticeships defunded — switch to AIHow to pivot your leadership L&D to AI-powered standards.

The Growth & Skills Levy

What the successor to the Apprenticeship Levy actually changes.

Announced as the 2026 replacement for the Apprenticeship Levy, the Growth and Skills Levy is designed to give employers more flexibility with their levy spend. The headline shift: short courses and non-apprenticeship training become fundable alongside apprenticeships. The final policy detail is still being consulted on, but the direction of travel is clear.

For employers who've struggled to spend their full levy on apprenticeships alone — particularly those with distributed teams, project-based workforces, or rapid skill-change needs — this is a material change. It also means providers who offer both apprenticeships and short courses (like TESS) will have a natural advantage in the transition.

What to do now: model the impact on your 2026/27 spend. How much unspent levy expires? How many short courses would you fund if you could? Get this on your exec agenda before the detailed rules drop.

Read more

Growth & Skills Levy: employers' guideWhat to expect and how to prepare your 2026/27 plan. Levy CalculatorInteractive tool. Work out your funding band and spend.

SME funding: 0% co-investment for under-25s

A quiet but significant change for smaller employers.

From April 2026, SMEs (sub-levy threshold employers) will get 100% funding for apprentices under 25 — the current 5% co-investment is cut to zero. For a business running even a handful of AI apprenticeships, this removes the last financial barrier and makes the economics identical to large levy-paying employers.

Practical impact An SME enrolling four apprentices on the AI & Automation Practitioner L4 used to fund £3,600 in co-investment. From April 2026, that's £0. If you're an SME holding off on apprenticeships because of the 5%, April 2026 is the moment.

Read more

SMEs & apprenticeshipsDedicated information for sub-levy employers. AI apprenticeships for SMEs in 2026Sector-by-sector worked examples.

The 2026 timeline

The key dates to put on your L&D and finance calendars.

Now – Apr 2026
Audit your current apprentice cohorts.Identify anyone on a defunded standard. Confirm completion pathway with your provider.
Apr 2026
SME co-investment drops to 0% for under-25s.If you're an SME, this is your green light for under-25 cohorts.
May – Aug 2026
Last window for new enrolments on defunded standards.Only if your provider can guarantee a completion pathway. Otherwise, choose a replacement.
Sep 2026
16 standards lose funding.No new levy-funded cohorts on defunded standards.
Oct 2026 onwards
Growth & Skills Levy phases in.New spending flexibility. Review 2026/27 L&D allocation.
Rolling
24-month levy expiry clock.Set quarterly finance alert. Recover before expiry.

What to do this quarter

Five concrete actions. None of them take more than an afternoon.

Get ahead of September 2026.

Download the 8-page Levy Readiness Checklist. Tick what's done, action the rest.

Download the checklist (PDF) Book a 30-min review

Frequently asked questions

The six questions we hear most often from employers.

What apprenticeship standards are being defunded in September 2026?
16 apprenticeship standards will lose funding from September 2026, including Team Leader Level 3, Operations Manager Level 5, Coaching Professional Level 5, and 13 others. Learners already enrolled before the cut-off date can usually continue. New cohorts on defunded standards from September 2026 onward are not eligible for levy funding.
What is the Growth and Skills Levy?
The Growth and Skills Levy is the 2026 successor to the Apprenticeship Levy. It gives employers more flexibility to fund short courses and non-apprenticeship training alongside apprenticeships. Exact rules are being finalised but the direction is clearer spending choice for levy-paying employers.
Will SMEs get full funding for AI apprenticeships in 2026?
From April 2026, SMEs get 100% funding for apprentices under 25 — the current 5% co-investment is being cut to zero. This removes the last financial barrier to AI apprenticeships for smaller employers. Employers over the levy threshold have always had 100% funding through their levy account.
Should I enrol on a defunded standard before September 2026?
Only if the start date and completion pathway are confirmed with your provider. Enrolling a cohort in May or June 2026 assuming you can re-enrol in October is risky — once a standard is defunded, new enrolments stop. Consider mapping your needs to a currently-funded standard like AI & Automation Practitioner Level 4 (ST1512) instead.
What replaces Team Leader Level 3?
TESS Group's Data-Driven Team Leader Level 3 apprenticeship (ST0795) is the direct replacement — covering leadership, team management and modern data and AI skills including Power BI. The funding band is £13,000 and cohorts start monthly.
Does the AI & Automation Practitioner Level 4 need coding?
No. ST1512 is explicitly designed for non-technical staff in finance, HR, operations, marketing and customer service. The programme uses low-code and no-code tools. The skills focus is on automation, prompt engineering, data literacy and governance — not software engineering.