Leadership Development Without the Levy: What Businesses Need to Know After the Apprenticeship Funding Changes
- Michael Casanova
- May 7
- 5 min read
The government has defunded leadership and management apprenticeships from September 2026. Here's what that means for your business and what to do next.
If your organisation has been using apprenticeship funding to develop your managers and team leaders, you've probably already heard the news. From 1 September 2026, the government is withdrawing levy funding from 16 apprenticeship standards and three of the most widely used leadership and management programmes are on that list.
We're talking about:
Team Leader / Supervisor (Level 3) the most popular standard being defunded, with over 12,000 starts in 2024--25 alone
Operations / Departmental Manager (Level 5)
Coaching Professional (Level 5)
For businesses that have come to rely on the apprenticeship levy as their primary route into leadership development, this is a significant shift. But it doesn't have to mean the end of developing great managers and leaders. It just means thinking differently about how you do it.
Why Has the Government Done This?
The government's stated rationale is that leadership and management apprenticeships have grown significantly but they're predominantly used by people aged 25 and over as continuing professional development, rather than as an entry point into skilled careers for young people. Ministers have argued that this kind of development is something employers should be funding themselves.
Whether you agree with that position or not, the direction of travel is clear: the levy is being refocused on younger people entering work for the first time, with new incentives for SMEs hiring apprentices aged 16 to 24.
That's a reasonable ambition. But it leaves a very real gap for the majority of organisations that have used these programmes to build leadership capability at every level of their business.
Why This Matters (A Lot)
The UK has a significant management capability problem.
Research from the Chartered Management Institute (CMI) estimates that 82% of UK managers are promoted into management roles without any formal management training.
These are your team leaders, your line managers, your heads of department, the people your business depends on every single day to motivate teams, drive performance, manage change and retain talent.
When managers aren't properly developed, the impact ripples outward.
Teams underperform. Good people leave. Newly promoted managers struggle with confidence and decision-making.
Senior leaders spend time firefighting problems that skilled management should be preventing.
Leadership development isn't a nice-to-have. It's one of the most direct investments you can make in the commercial health of your organisation.
So What Are Your Options?
If you've been relying on apprenticeship funding for leadership development, here are the practical routes forward:
Act Now, While Funding Is Still Available: If you have employees who could benefit from a Team Leader Level 3 or Operations Manager Level 5 programme, the window to start them on a funded apprenticeship is closing fast. New starts on defunded standards are already being capped to prevent a last-minute rush so if you're planning to use existing levy funds, now is the time to move, not September.
Open Programmes (High Quality, Without the Bureaucracy): One of the things many businesses discovered during the apprenticeship era is that the administrative burden can be considerable. Monthly reporting, off-the-job training tracking, end-point assessment preparation (it takes significant time from both learners and managers). High-quality open programmes offer a leaner, faster, and often more practical alternative. Participants learn alongside peers from a range of businesses and sectors, which brings its own richness to the learning experience with real-world perspectives, different industry approaches, and the kind of honest conversation that's harder to have when everyone is from the same organisation. Good open programmes can still lead to recognised ILM or CMI qualifications at Levels 3, 5 and 7 so your managers gain the same professional credibility without the apprenticeship framework wrapped around it.
Bespoke In-House Programmes (For Groups of Four or More): If you're looking to develop a cohort of managers, a tailored programme built around your organisation's specific challenges, values and goals is often the most impactful option. Content can be directly aligned to your business context, your culture and your strategic priorities meaning learning transfers more immediately into real performance improvement.For organisations with four or more people to develop, this route is frequently more cost-effective than individual open programme places, and far more strategically powerful.
Coaching and Mentoring as a Foundation: Alongside structured programmes, building a coaching culture within your organisation is one of the most sustainable investments you can make in leadership development. When your senior leaders and managers develop coaching skills, the entire organisation benefits -- not just the individuals on a formal programme.
The Commercial Case for Self-Funding Development
We know the instinct, when government funding disappears, is to ask: can we afford to do this ourselves?
The better question is: can we afford not to?
The cost of poor management in lost productivity, in staff turnover, in missed targets and disengaged teams is substantial. Research consistently shows that people don't leave bad companies, they leave bad managers. The investment in developing your managers well is one of the clearest returns on investment in business.
And the good news is that high-quality, accredited leadership development doesn't have to cost anywhere near what a full apprenticeship programme would have. Without the overhead of the funding framework, providers can often deliver more focused, flexible and cost-effective programmes.
How CAKE People Development Can Help
At CAKE, we've been developing leaders and managers for businesses across the UK for years with and without apprenticeship funding. Our open programmes are ILM and CMI accredited, delivered by highly experienced facilitators, and designed to create real, lasting change in the people who attend them.
Our current open programme offer includes:
Lead Up (ILM Level 3) for team leaders and first-line managers. Three virtual, highly interactive modules. Autumn 2026 cohort starting 22nd September 2026.
Lead On (ILM Level 5) for established middle managers. Available virtually or in-person. Four modules. Autumn 2026 cohort starting 24th September 2026.
Lead Beyond (CMI Level 7) for senior leaders, directors and executives. A blended, strategically-focused programme. Autumn 2026 cohort starting 21st October 2026.
Effective Coaching & Mentoring (ILM Level 5) for managers, HR and L&D professionals who want to build coaching capability. Flexible start dates available.
All of our programmes are supported by CAKE Connect, our digital learning platform, with pre- and post-workshop activities that embed learning into everyday practice.
For businesses looking to develop four or more people, we also design bespoke programmes tailored entirely to your organisation, your sector and your goals.
The Bottom Line
The removal of levy funding for leadership and management apprenticeships is a genuine disruption for many organisations. But it's also an opportunity to step back and ask a more important question: what does great leadership development actually look like for our people and our business?
The answer probably involves more flexibility, faster outcomes and less administrative overhead than the apprenticeship framework ever allowed. It almost certainly involves real investment but investment that delivers a return.
If you'd like to talk through your options, we'd love to have that conversation.
Get in touch with the CAKE team:
t 01603 733006
CAKE People Development is an ILM and CMI Approved Centre, delivering accredited leadership and management programmes across the UK and Internationally . Based in Norwich, Norfolk.
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