UK Growth and Skills Levy: The CEO and CHRO Workforce Action Plan

The UK Growth and Skills Levy, which began reshaping the Apprenticeship Levy from April 2026, gives large employers more flexibility in how they invest workforce development funds — but a new 12-month expiry rule means CEOs who do not act now will lose levy contributions they have already paid.

The reform is material and immediate. Under the previous Apprenticeship Levy, large employers had 24 months before unused funds expired. From April 2026, that window has been reduced to 12 months. This change, combined with the removal of the automatic 10% government uplift on levy account funds, means that organisations that have been building levy balances without deploying them into training programmes face a hard financial deadline. According to Grant Thornton’s apprenticeship levy reform analysis, the changes represent the most significant restructuring of the levy since its introduction in 2017 — and require CEOs and CHROs to treat workforce investment as a strategic planning priority rather than an HR administration task. The government’s stated goal is to deliver 50,000 additional young people into apprenticeships while giving employers the flexibility to address skills shortages in priority sectors including technology, AI, leadership, and business operations.

What Has Changed Under the Growth and Skills Levy?

Three structural changes define the Growth and Skills Levy and have direct CEO-level implications. First, the 12-month levy expiry: from April 2026, unspent levy funds expire after 12 months rather than 24. Organisations that have been accumulating balances without deploying them into approved programmes must now either commit those funds to qualifying training or write them off. Second, the introduction of foundation apprenticeships and short-course qualification units from April 2026: employers can now use levy funds for shorter, skills-focused programmes rather than being restricted to full apprenticeship standards. This significantly increases the range of workforce development activity that can be funded through the levy. Third, the removal of the government uplift: the automatic 10% uplift on levy account funds has been discontinued, making the financial case for deploying funds more time-sensitive.

According to the Solveway Growth and Skills Levy analysis, the new model places stronger emphasis on employer responsiveness and strategic workforce planning. A new Level 4 AI apprenticeship has also been introduced from April 2026, directly addressing the skills gap in enterprise AI deployment and providing a levy-funded route for organisations building internal AI capability. For CEOs running technology transformation programmes, this is a concrete mechanism for funding the AI literacy and technical training that transformation programmes require but often struggle to budget for through conventional learning and development spend.

• Executive Action: Request a current levy balance statement from your HR or payroll team immediately — identify how much is at risk of expiry within 12 months and which qualifying programmes could be accelerated to deploy those funds.
• Review whether the new Level 4 AI apprenticeship, foundation apprenticeships, and short-course qualification units can be used to fund skills programmes already planned for your technology transformation roadmap.
• Brief the board on the financial write-off exposure if levy funds expire unused — this is a recoverable cost that should appear in the people strategy update at board level.

How Should CEOs Align the Growth and Skills Levy With AI Transformation Strategy?

The Growth and Skills Levy reform arrives at a moment when CEOs are investing heavily in AI transformation but consistently identify skills and capability gaps as the primary constraint on programme delivery. According to the EY UK CEO survey published in May 2026, 87% of UK CEOs expect to increase M&A activity in the next 12 months, with technology and AI capability a primary driver. Yet technology integration and AI deployment consistently stall not because of capital or vendor constraints, but because the existing workforce lacks the skills to work effectively alongside AI systems. The Growth and Skills Levy, if deployed strategically, provides a levy-funded vehicle for closing that gap.

The practical alignment strategy requires CEOs and CHROs to map levy-eligible training against the skills requirements of specific transformation workstreams, not against generic job families. A workforce reskilling programme for AI implementation — covering data literacy, AI-assisted workflow design, prompt engineering, and change management — can now be structured using the new short-course qualification units available from April 2026, making it levy-eligible in a way that traditional AI training programmes were not. Explore the INFORMD briefing library for further intelligence on AI transformation, workforce strategy, and technology investment. The INFORMD executive self-assessment can help CEOs and CHROs evaluate the current state of their workforce AI readiness.

• Executive Action: Map your AI transformation skills requirements against the Growth and Skills Levy’s new qualification unit framework — identify specifically which skills gaps can now be addressed through levy-funded short courses or the new Level 4 AI apprenticeship.
• Integrate workforce levy spend into your AI transformation investment case — this reduces the net cost of capability development and strengthens the business case for reskilling over external hiring.
• Appoint a named senior owner (CHRO or transformation lead) with accountability for the levy deployment plan and authority to commit funds within the 12-month window.

What Are the Implications for Mid-Market and Non-Levy-Paying Employers?

The Growth and Skills Levy reform also materially changes the position for smaller employers who do not pay the levy. From April 2026, small and mid-sized businesses have 100% of apprenticeship training costs covered for apprentices under 25, eliminating the previous 5% co-investment requirement. This makes apprenticeship routes significantly more accessible for mid-market companies and removes a barrier that had previously discouraged smaller employers from using the system to build specialist capability.

For FTSE-listed companies that operate through subsidiary structures or franchise models, the position of non-levy-paying entities within the group must be assessed separately. The ability to transfer levy funds between connected employers has changed, and group-level workforce strategies that relied on transferring levy contributions to supply chain partners or subsidiaries need to be reviewed against the new rules. The Momentous Learning analysis of the April 2026 reforms notes that the priority sector focus — including technology, AI, and business operations — aligns the levy with the skills needs that most large-employer transformation programmes are trying to address. Use the INFORMD workforce planning templates to structure the board-level workforce strategy update that the Growth and Skills Levy reform requires.

• Executive Action: Review levy transfer arrangements for subsidiary, franchise, or supply chain entities — confirm whether existing transfer agreements comply with the revised Growth and Skills Levy rules from April 2026.
• Engage your training providers to confirm which of your current apprenticeship and development programmes remain approved under the new levy framework and which require renegotiation.
• Present a levy deployment plan to the board as part of the people strategy update — covering current balance, 12-month expiry exposure, planned deployment, and the connection to AI transformation capability requirements.

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