New funding rules for logistics apprenticeships

Unlike traditional education routes, apprenticeships allow employers to tailor training to the specific needs of their organisation, ensuring staff are equipped with the exact expertise their role demands.

At the same time, employees benefit from earning while they learn, creating a stronger sense of engagement and alignment with the company’s long-term goals.

By investing in an individual’s professional development, businesses cultivate loyalty and talent retention, reducing recruitment costs in the long term. For younger talent in particular, the opportunity to obtain a degree-level qualification without accruing student debt is highly attractive: a win-win scenario for both employers and employees.

With apprenticeships also enabling organisations to diversify their workforce and upskill existing staff for leadership roles, they remain an effective strategy for future-proofing essential talent pipelines. However, significant changes are coming to the funding model for level 7 apprenticeship degrees, which will mean employers need to adapt quickly.

Upcoming changes to level 7 apprenticeship funding

From January 2026, public funding for level 7 apprenticeships, via the Apprenticeship Levy, will no longer be available for new starters aged 22 and older. Young people with additional support needs, such as care leavers or those who hold an education, health and care plan (EHCP), will continue to be eligible until the age of 25. Level 6 apprenticeship funding will remain available under the current system.

The numbers at a glance

The data speaks volumes about the potential changes that businesses will need to prepare for. According to the most recent academic year figures, only 2% of level 7 apprenticeship starts were for individuals under 19 years old. Meanwhile, 34% fell within the 19 to 24-year-old age group, leaving more than 60% of apprenticeship candidates outside the scope of funding eligibility from 2026.

Popular level 7 apprenticeships set to be affected include the senior leader apprenticeship, which may impact the logistics sector due to the unique pain points it’s experiencing. For instance, 66% of logistics companies cite increased transport costs, 55% report delays, and over 39% point to border disruptions and extra paperwork stemming from post-Brexit issues. All of these issues point towards the ongoing macro trends the industry is facing, which needs agile, upskilled employees to be able to tackle.

Maximise funding while it’s still available

Businesses can still use available Levy funding for level 7 apprenticeship learners, providing they’re on programme before the end of December. However, this presents a narrow window of opportunity for logistics businesses to optimise their immediate training plans. Here are some key actions to consider before the changes come into effect:

1. Audit skills needs and future workforce requirements

Take stock of current skills gaps and forecast areas where advanced training will be critical in the next three to five years. Employers can better identify which team members or new hires should be enrolled in level 7 apprenticeships this year, before funding lapses.

2. Plan ahead for cohort recruitment

With the cut-off looming, businesses may want to accelerate efforts to recruit eligible apprentices in the final months of funding. Partnering with education providers early can ensure smoother enrolment and allocation processes.

3. Prioritise age-eligible candidates

While it’s essential to think inclusively, targeting talent that will no longer be able to apply after the changes to the funding criteria are implemented, should be a key short-term focus. From next year, candidates aged 22 and over will no longer be covered for level 7 courses, under the funding, but they remain eligible for the next few months, providing they are on programme before the end of the year.

4. Begin to explore level 6 alternatives

If funding constraints make level 7 programmes unviable for your business from January 2026, the next step is to consider whether level 6 apprenticeships could meet a similar training need.

These programmes still fall under Levy funding in 2026, and they deliver degree-equivalent education. Level 6 courses help those who may not have had the opportunity to go university to gain a degree qualification – increasing diversity efforts and helping with talent retention and attraction.

Preparing for Levy changes

While January 2026 marks a shift in how businesses can support level 7 apprenticeships, a proactive mindset and flexible strategies will help to maintain workforce development efforts long into the future.

For employers committed to advanced apprenticeships, adjusting training budgets to accommodate the full cost of level 7 programmes may be necessary. Viewing this as a long-term investment in talent retention and capability building can help to frame the conversation with key stakeholders.

Steven also explains how universities and training providers can offer tailored solutions or point businesses towards other courses that may fit their learning needs, such as lower-level apprenticeships.

Engaging in dialogue with universities may unlock innovative solutions to funding and skills gap challenges.

Although changes are targeting level 7 programmes, other government-backed initiatives may help to mitigate the cost of workforce development, so it’s always best to stay informed about evolving funding streams, tax incentives or co-sponsorship opportunities in your sector.

While the government’s decision to restrict funding for level 7 apprenticeships undoubtedly presents new challenges, employers who act now can still maximise the available opportunities.

By planning strategically and exploring alternative initiatives, the logistics sector can continue to thrive through a skilled, motivated and capable workforce.

Steven Hurst, director of corporate learning, Arden University