Degree apprenticeships ‘under threat’ as more courses defunded

There are fears that the government could defund more degree apprenticeships in England if the number of out-of-work young people continues to rise, as experts warn policy changes could mean universities and employers abandon higher-level training altogether.

Earlier this month, the government announced that it would remove a further set of apprenticeships from the list of courses eligible for funding through the Growth and Skills Levy – a fund larger employers are obliged to pay into.

It follows last year’s decision to axe funding for level 7 apprenticeships for anyone over the age of 21 in a bid to enrol more young people on the programmes. 

Among the courses cut in the latest set of changes was the level 6 Chartered Manager Degree Apprenticeship (CMDA), which was popular among employers looking to train their existing workers to become managers.

“The principle of apprenticeships is that they were always employer-led,” said Barney Roe, deputy chief executive at the Chartered Association of Business Schools (CABS). “What’s clearly happened here is that employer demand and learner demand [for] the CMDA hasn’t featured in the considerations of it being retained.”

Roe said defunding the programme goes against the government’s goal of boosting economic growth, with research from the Chartered Management Institute suggesting that management apprenticeships could generate economic gains of between £600 million and £700 million each year. 

However, Roe predicted that if the number of young people not in education, training or employment (NEETs) – which reached 957,000 in 2025 – continues to grow, the government could look to reprioritise more funding towards apprenticeships aimed at this demographic. 

“The government has already demonstrated that they aren’t [looking] to create growth by prioritising high-level skills,” he said.

Without being able to draw on the levy, it appears unlikely that employers will be keen to continue investing in higher-level apprenticeships. Investment by businesses in employee training is already in decline and research published in 2024 found that 68 per cent of employers would discontinue degree apprenticeships without the levy.

In particular, many cash-strapped public sector bodies enrol their employees on levy-funded apprenticeships. 

“The public sector is being squeezed,” said Raheel Nawaz, pro vice-chancellor for education and research at the University of Staffordshire. “If they are already paying the levy, and this will be on top of the levy, then…where do they find the money?”

Jo Burgess, director of professional apprenticeships at Teesside University, added that employers want “clearer information about upcoming reforms”. 

“Many businesses plan their workforce development more than a year in advance, and earlier insight into potential changes would allow them to prepare in a structured way.”

Meanwhile, some universities and business schools that offer these programmes have begun rethinking their strategy in response to changing government policies. 

In a 2025 survey of CABS members, 38 per cent of schools that previously provided level 7 apprenticeships said they planned to discontinue these programmes following the policy changes, while 17 per cent said that they would adapt their offer to continue providing the programmes. 

“Degree apprenticeships are not a cash cow for any university,” said Nawaz. “Universities will have to take a view on whether degree apprenticeships are still viable for them or not.” 

He said his institution was still keen to deliver them, adding that higher-level apprenticeships typically have better student outcomes than lower-level ones. 

Burgess said Teesside had been “actively reshaping our apprenticeship portfolio over the past 18 months to align with where we believed government policy would focus”.

This included “building greater capability in STEM, construction, sustainability, AI and digital, while continuing to strengthen our offer in health, social care and education”, as well as launching a new early years teacher degree apprenticeship.

helen.packer@timeshighereducation.com