At our recent advisory group meeting, we were briefed by Will Holt, Managing Director of Education and Training at ICAEW, on the impact of government changes to Level 7 apprenticeship funding. This has far-reaching consequences for professional firms, training providers and higher education institutions.
If you’re not familiar with apprenticeship funding, in short, businesses with an annual payroll over £3 million pay a 0.5% apprenticeship levy. Employers can recoup the levy to cover the cost of employing apprentices under an approved scheme. Smaller businesses are also eligible, although they are exempt from the levy. Until now, there has been no upper age limit on the Level 7 apprenticeship, which is the scheme firms use to offset the training costs of their graduate trainees.
The rules are changing from 1 January 2026 when apprentices must be under the age of 22 when they start, which will push many graduates out of the Level 7 funding pool. To put this in perspective, last year 55% of ICAEW students were aged between 22 and 25.
The changes are expected to direct recruitment activity of firms towards school-leavers who remain eligible for apprenticeship funding and, consequently, will have a negative impact on the recruitment of graduates. This comes against a backdrop of economic uncertainty, technological upheavals, and increased regulation around employment, as well as a tightening of visa rules and higher taxes.
It appears to be a gloomy outlook for accounting educators, particularly in higher education. What has worked for us in the past may no longer be effective. Will Holt, however, remains optimistic, and so do we, although it requires a reappraisal of our role in the professional recruitment pipeline.
We believe there’s an opportunity to start reimagining what accounting education looks like before professional training. We have strong views about this and are excited by the possibilities. Communities like this one, and others such as Accounting Streams, Accounting Cafe and BAFA will be more important than ever. The QAA Subject Benchmark Statement, not yet six months old, already seems prescient. Why not join us on 4 December 2025 at 1pm (GMT) to discuss the relevance and impact of the Benchmark Statement? It may be just the blueprint we need to start on this new journey.
*the views expressed are the author’s and not ICAEW’s