Your management apprenticeships are being defunded in September. Here’s the levy-funded AI route that replaces each one.

If you have funded a manager’s development through the apprenticeship levy in the last decade, you have almost certainly used one of the standards now being withdrawn. Skills England has confirmed that 16 apprenticeship standards lose funding from 1 September 2026, and the leadership and management group inside that list includes the three workhorses: Team Leader / Supervisor (Level 3), Operations / Departmental Manager (Level 5) and Coaching Professional (Level 5). The Chartered Manager Degree Apprenticeship (Level 6) is affected too, and separately, since January 2026, most learners aged 22 and over have already lost funding for the Senior Leader apprenticeship (Level 7).

The reason is openly stated: government is redirecting apprenticeship money towards younger learners, in line with the Youth Guarantee and the refocused Growth and Skills Levy. Leadership development for existing managers is being deprioritised. We will be straight with you here, because some of these are standards we deliver ourselves: this is a real change and it affects real cohorts. The good news is the capability does not have to go backwards. The funding route stays open, it just changes shape.

Pull the two June headlines together. On 8 June the government held its first AI Adoption Summit and committed £200m to getting British business to use AI. In the same window, it confirmed it is pulling funding from generic management apprenticeships. The signal could not be clearer: the state will no longer pay to teach management in the abstract, but it will back leadership development that builds the AI capability the economy now needs.

For employers, that reframes the whole decision. The question is not “how do I save my defunded Team Leader cohort?” It is “how do I upgrade my leadership pipeline to the version the funding is now pointed at?” Same levy, better destination.

Here is the part to bookmark. Every leadership standard losing funding has a forward-looking, levy-funded TESS route that keeps the leadership content and adds the AI and data capability.

Notice the shape. The defunded routes were long, generic and assessment-heavy. The replacements are shorter, sharper and built around the capability the £200m is chasing. You are not patching a hole. You are trading up.

We deliver some of the standards being cut, so I am not going to pretend this isn’t a real change. But every employer I’ve walked through it has reached the same conclusion: they were going to have to add AI to their leadership development anyway. The defunding just forces the upgrade they were putting off, and the levy still pays for it. Lisa O'Reilly, Director, TESS Group

If you take one thing from this post, make it the AI Leadership Units. They are the cleanest answer for senior populations that used to sit on Level 5, 6 or 7 programmes. Three Level 5 units, AU0009 (AI Strategy), AU0010 (AI Adoption & Governance) and AU0011 (AI Delivery & Transformation), at £750 per learner per unit, fully funded through the Growth and Skills Levy, with no end-point assessment. They run in weeks, not months, and you can take one, two or all three. This guide helps you pick the right unit for each leader.

And before you commit anyone, your leaders can sample the curriculum at one of our free AI Leadership taster days (16 July, 6 and 12 August), a real six-hour day with an NCFE workbook, no obligation. It is the lowest-risk way to test the replacement before you move a cohort.

For the bulk of your management population, two routes do the heavy lifting.

AI for Team Leaders (Level 4) is the replacement for the Team Leader / Supervisor L3 that so many employers ran. It keeps the people-leadership and CMI-accredited development, and adds the AI fluency a first-line manager now needs to lead a team that is itself starting to use AI. The honest side-by-side is in Team Leader L3 vs AI for Team Leaders L4, and the role-level case is in AI people leaders vs Team Leader L3.

AI for Operations Leaders (Level 4) is the replacement for Operations / Departmental Manager L5. It runs from process automation through to CMI Level 5 change management, so a middle manager leaves able to redesign an operation around AI and lead the people through the change. The comparison is laid out in AI for Operations Leaders vs Operations Manager L5, with the full alternative page here.

Both draw on the same apprenticeship funding you were already using, so for most employers the switch is cost-neutral and capability-positive. We will confirm the exact funding for your situation on a call, because eligibility depends on payroll size and learner age.

Some employers used these apprenticeships purely for the CMI or ILM accreditation, not the apprenticeship wrapper. That route is unaffected: standalone CMI and ILM leadership and management qualifications remain available outside the levy. The pattern we recommend most often now is to pair a short AI Leadership Unit (for the capability the funding is chasing) with a CMI or ILM qualification (for the leadership badge), giving leaders both. The CIPD vs CMI comparison helps you choose the accreditation, and the deeper case for the whole shift is in AI leadership vs traditional management apprenticeship.

Don’t think of September as a deadline to survive. Think of it as the moment the funding finally pays for the leadership development you actually need in 2026. Move the cohorts you must, finish the ones you can, and put the savings into the AI capability that turns a manager into someone who can lead an AI-enabled team. Rod Doyle, Director, TESS Group

1. Audit your live cohorts. List every learner on a defunded standard and their expected completion date. Anyone finishing before 1 September is generally funded through.
2. Decide finish-or-move per learner. Use our finish-without-disruption and transition playbooks.
3. Map new starts to the AI routes. Team leaders to AI for Team Leaders L4, ops managers to AI for Operations Leaders L4, senior leaders to the AI Leadership Units.
4. Sample before you commit. Send decision-makers to a free taster day, and run the 2-minute employer quiz to find the right level.

The wider context

This is the funding half of a single story. The £200m AI Adoption Summit showed where the money is being pointed; the leadership defunding shows what it is being pointed away from. Underneath both sits the Growth and Skills Levy refocus, with tighter expiry and narrower scope from the autumn. The employers who come out ahead are the ones who read all three as one instruction: stop funding generic management, start funding AI-enabled leadership, and do it before the rules tighten.

Sources & further reading

Times Higher Education: Leadership and management apprenticeships latest to be defunded. NHS Employers: Government to defund management apprenticeship standards. HEPI: Defunding Level 7 apprenticeships.