The Chancellor has promised a surge in skills funding to get a million young people into training by the end of the Parliament, as part of a wider push to plug critical labour gaps and power up Britain’s energy transition.
Rachel Reeves used the Spending Review to unveil a £1.2 billion a year package by 2028–29 – the biggest investment in post-16 training in over a decade.
The Treasury says this will support an extra 65,000 learners a year, mainly through apprenticeships and targeted courses tied to key sectors like energy, construction and digital.
Foundation apprenticeships will launch from August 2025, with the government aiming for 30,000 starts over the next four years.
These new schemes – aimed at school leavers and people without formal qualifications – will come with employer incentives and more flexible requirements on English and maths to boost uptake.
A separate £625 million fund will be used to train up to 60,000 workers in construction-related trades – including welding, civils and retrofit – over the next four years, helping tackle labour shortages in housing and infrastructure.
I am providing record investment for training and upskilling – £1.2 billion a year by the end of the spending review to support over a million young people into training and apprenticeships so that their potential, their drive and their ambition is frustrated no longer.”
Rachel Reeves
The reforms will be overseen by the newly created Skills England body, set up to make sure levy cash is spent more effectively and training is better aligned with regional economic needs.
The agency will have powers to direct funding towards areas with the greatest shortages, using labour market data and employer input to shape provision.
The government says this approach will break what Reeves called the “cycle of wasted potential”, where thousands of young people are turned away from training due to limited places or rigid course structures.
The move has been welcomed by EngineeringUK which has long argued that the skills gap must be tackled if the energy transition is to work.
Its CEO Dr Hilary Leevers commented:
“The Treasury’s commitment to increase funding for apprenticeships and training to reach an extra £1.2 billion per annum by 2029 includes support for high-quality training for over 1.3 million 16- to 19-year-olds. These efforts are very promising, but must be focused into areas of workforce need.
“To future proof growth, the Government needs to break down barriers for young people from all backgrounds to access engineering and technology careers. The Chancellor clearly recognises the impact of socioeconomic status on opportunity but the need to improve the progression of women into engineering and technology continues to be overlooked, with women making up just 16.9% of that workforce.”
And Kelly Becker, UK Country President of Schneider Electric, a big player in major infrastructure, agreed it was the right step but wanted clarity of how it would work.
“The devil is in the detail – we need to see how the funding will be allocated and joined up with the Government’s overarching policy plans for industrial growth and skills to truly understand their effectiveness,” she said.
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