The Growth and Skills Levy officially took effect in the UK in April 2025, ushering in a more flexible way for businesses to invest in workforce training. If you’re in construction, engineering, or manufacturing, whether as an employer or worker, here’s a guide to what this means for you.
For businesses: More choice, more control over training spend
If your annual payroll is over £3 million, you’ll continue paying 0.5% into a training fund through HMRC, just like before. But the rules are now more flexible.
- Wider training options
Half your levy pot can still be used for apprenticeships, but the big change is you can use the other half for a range of approved training: bootcamps, modular courses, digital upskilling, even short, sector-specific programmes that suit your business’s needs. - Less red tape
The process is set to be easier, especially for smaller businesses who’ve struggled with admin before. - Regional skills funding
Funding will be targeted to fill local and industry-specific skills gaps, supporting growth in priority sectors such as construction, manufacturing, and engineering. - Focus on early careers
There’s encouragement (and incentives) for investing in younger workers and foundation apprenticeships, which good news if you’re looking to ensure your team is ready for what’s next.
What does this mean for you?
You’ll have more freedom to shape your workforce, train for what matters now (not just tomorrow), and use your levy for short, sharp skills upgrades instead of only long apprenticeships.
For workers: Skills, flexibility & new opportunities
You might be wondering what these changes mean if you’re a contractor, apprentice, or thinking about upskilling.
- More kinds of training funded
Levy-funded training will cover short technical bootcamps and modular courses, not just formal apprenticeships. If you want to brush up on newer systems or niche skills relevant to contracts, there’s a greater chance your employer or recruiter will fund it. - Easier access for career changers
The reforms make it easier for mid-career professionals to switch paths or gain new certifications in high-demand areas—especially useful in industries like construction, where regulations and best practices change often. - Quicker routes to qualification
Foundation apprenticeships and shorter training stints may become more common, giving new starters a faster introduction to the industry and allowing experienced contractors to upskill without the hassle of lengthy programmes.
Challenges & considerations
Despite all the positives, there are a few things to watch out for at this stage:
- Uncertainty about details
Many employers and contractors are still waiting for full clarity on which courses will be approved, how funding will work, and how the scheme will roll out. The government is refining the framework, so some questions remain open. - Risk of lower-value training:
Giving businesses more choice could mean money going to shorter or less impactful courses instead of thorough, hands-on apprenticeships. There’s concern quality might take a hit if the focus moves away from structured programmes. - SME challenges
While the system aims to be simpler for smaller firms, access to funding and red tape may still pose issues, especially as rules and online platforms take time to settle. - Impact on higher-level apprenticeships:
Some higher-level apprenticeships (like senior leaders) could lose support, which may make it harder for sectors with serious skills gaps (such as local government or health) to upskill their teams.
What should you do next?
Businesses: Take stock of your team’s skills needs and explore training providers offering courses approved under the new levy. Start discussing plans early so you can make the most of your levy contribution.
Contractors and Workers: Talk to your employer or agency about new funded training opportunities. If you want to shift your career path or enhance your skills, now is a good time to explore available options.
If you need help understanding how the Growth and Skills Levy affects your business or career, or how to utilise it best, get in touch with MHC:
📩 contractmh@mercuryhampton.com
📞 01925 906 640