{"id":37738,"date":"2025-03-05T17:41:48","date_gmt":"2025-03-05T17:41:48","guid":{"rendered":"https:\/\/www.hult.edu\/blog\/?p=37738"},"modified":"2026-05-06T16:44:01","modified_gmt":"2026-05-06T15:44:01","slug":"pulling-the-plug-how-withdrawing-level-7-funding-from-british-business-will-drive-slower-growth-and-productivity","status":"publish","type":"post","link":"https:\/\/www.hult.edu\/blog\/pulling-the-plug-how-withdrawing-level-7-funding-from-british-business-will-drive-slower-growth-and-productivity\/","title":{"rendered":"Pulling the plug: How withdrawing Level 7 funding from British business will drive slower growth and productivity"},"content":{"rendered":"
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Source: Assembled using data from Dayka Reynolds<\/a>,<\/em> People Management<\/a><\/em> the Times<\/a><\/em>, BW Business Advisers<\/a><\/em>, and Veremark<\/em>.\u00a0<\/a><\/figcaption><\/figure>\n

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A major shake-up is imminent\u2014But where is British business?<\/h3>\n

In the Autumn 2024 budget announcement, the UK government proposed the discontinuation of Level 7 apprenticeship funding, including the senior leader apprenticeship. The decision was made with the best of intentions\u2014to help skill British business for the next round of growth\u2014but it remains short-sighted in its approach by undermining the key skills of leadership and management as central to the growth agenda.<\/p>\n

Our research indicates that whilst this move should be sending ripples through British business, raising concerns about the long-term impact on leadership development, productivity and financial stability, it has gone largely unnoticed. Many employers are simply unaware of the impending loss of the levy. From our research, we see more than 75% of businesses and their leaders are unaware of the changes to the levy. Meaning they\u2019ll be missing out on key funding with the impact of this being felt way after this financial year. If one estimates that it takes \u00a350,000 to \u00a375,000 to recruit externally for senior leaders, and companies end up saving over 50% in costs for developing internal candidates, then the cost to British business is likely to be significant.<\/p>\n

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As British business loses its ability to develop leaders internally, the recruitment costs for 1,000 businesses replacing one senior leader are likely to total over \u00a350 million.<\/h3>\n

For years, the Level 7 funding levy has been a critical resource for businesses. It allows them to upskill future leaders and foster internal growth. The removal of this funding threatens to undermine these efforts, with significant financial and operational consequences for British businesses. This research will explore the implications of this decision, emphasizing the urgency for companies to enrol staff in these programs while funding is still available.<\/p>\n

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The Role of Level 7 Apprenticeships in Business Growth<\/strong><\/h3>\n

Level 7 apprenticeships, such as the senior leader master\u2019s level program<\/a>, have played a vital role in developing leadership capacity across industries. The program has enabled businesses to utilise their levy payments effectively to train leaders internally, reducing the reliance on external recruitment and associated costs. The NHS, for example, has relied heavily on this funding to create progression routes, retain talent and improve service delivery.<\/p>\n

According to the survey conducted by Hult Apprenticeships at Ashridge, 94% of employers considered Level 7 apprenticeships critical or important to their leadership and management strategy. In the NHS, this number rose to 100%. The overwhelming support for these programs highlights their importance not just for individual organisations but also for the broader economy.<\/p>\n

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Financial and Productivity Losses: Quantifying the Impact<\/strong><\/h3>\n

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The withdrawal of Level 7 funding is expected to result in significant financial losses for British businesses. These losses can be attributed to several factors, including:<\/p>\n

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  1. Increased recruitment costs<\/strong>: Organisations will be forced to rely more on external hiring for leadership roles, which is significantly more expensive than developing internal talent<\/li>\n
  2. Reduced productivity<\/strong>: Without the structured development provided by these programs, businesses may experience a decline in productivity due to a lack of skilled leadership<\/li>\n
  3. Higher training costs<\/strong>: Businesses will have to fund leadership development independently, increasing operational costs<\/li>\n<\/ol>\n

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    To estimate the potential loss, consider the following:<\/p>\n