The Government has unveiled a £725 million package of reforms to the apprenticeship system, promising to tackle youth unemployment and stimulate economic growth by expanding training opportunities over the next three years.
Thousands more young people are expected to benefit as ministers attempt to reverse a decade-long decline in apprenticeship starts.
A key element of the reforms is a £140 million pilot scheme that will give regional Mayors new powers to connect young people, particularly those not in education, employment or training (NEET), with apprenticeship roles at local employers.
The Government says partnering with regional leaders will ensure training better reflects the needs of local economies, helping businesses access candidates with the right skills.
In a move welcomed by smaller firms, ministers confirmed that the full cost of apprenticeships for eligible under-25s at SMEs will now be fully funded, removing the 5% co-investment rate that previously applied.
The change is expected to open up thousands of additional opportunities, easing financial pressure on businesses and making it easier to bring young talent into the workforce.
What it means for garages
– No training cost for under-25 apprentices at SMEs — making it cheaper to bring in young talent.
– More local recruits through a new £140m mayoral pilot matching NEET young people with employers.
– Flexible training from 2026, including short courses and a new Level 4 AI apprenticeship to support skills in modern vehicle tech.
– A push to rebuild the youth talent pipeline after a 40% drop in apprenticeship starts.
In short, the reforms could ease recruitment and training for garages but the real impact depends on strong local delivery.
From April 2026, employers will also gain access to a wider range of short, flexible training courses in areas including AI, engineering and digital skills.
The reforms include collaboration with the defence sector to create new work-based training options aimed at developing critical future-facing skills.
A new Level 4 apprenticeship in AI will also be introduced as part of the drive to modernise the system.
The Government confirmed plans to expand foundation apprenticeships into sectors such as hospitality and retail, providing more entry routes for young people at the start of their careers.
Ministers say the reforms are designed to simplify and modernise the system, ensuring it is more responsive to both employers and learners.
Prime Minister Keir Starmer said the package marks a shift in how the country values apprenticeships: “If you choose an apprenticeship, you should have the same respect and opportunity as everyone else.
“It’s time to put them on an equal footing with university.”
Work and Pensions Secretary Pat McFadden said the investment represents “a downpayment on young people’s futures”, arguing that with the right support “every young person deserves a fair chance to succeed”.
The government hopes the reforms will help reverse a nearly 40% drop in apprenticeship starts among young people since 2015/16.
This intervention builds on an existing £820 million package guaranteeing every young person the chance to gain essential skills and support to find a job. Combined, the programmes are expected to create 300,000 additional opportunities to earn and learn, including 55,000 guaranteed jobs.
