Matt Harvey, the IOR Education and Outreach Manager, attended the “Skills in Focus: Shaping the Future of Construction” event hosted by City & Guilds. The discussions highlighted how highly technical sectors tackle skills shortages, apprenticeship development, and workforce planning.

Key takeaways included:

• The importance of employer-led curriculum design
• Using modular and flexible training to meet evolving sector needs
• Engaging early-career entrants to secure future talent pipelines

These insights are highly relevant to the RACHP sector, reinforcing the value of proactive training strategies and modular skills development — exactly the opportunities the Growth and Skills Levy is designed to support.

The UK Government has announced major reforms to the apprenticeship system, replacing the existing Apprenticeship Levy with a new Growth and Skills Levy. For employers in the RACHP sector, this is not just a policy tweak — it is a significant shift that will influence how businesses recruit, train and retain skilled engineers over the next decade.

At a time when the sector faces persistent skills shortages, an ageing workforce, and increasing technical demands around low-carbon systems and digital technologies, understanding these reforms is critical.

The Background: The Apprenticeship Levy

Introduced in 2017, the Apprenticeship Levy required employers with a payroll above £3 million to contribute 0.5% of their wage bill into a digital account to fund apprenticeship training.

While the policy increased funding for apprenticeships, many employers found the system too rigid. Funds expired after a set period, training had to follow full apprenticeship standards, and flexibility was limited. In sectors like RACHP — where technical upskilling and specialist modules are often needed — this created barriers.

What Is Changing? The Growth and Skills Levy

The new Growth and Skills Levy is designed to make employer investment in skills more flexible and responsive to labour market needs.

The key changes include:

1. Greater Flexibility in Training

Employers will be able to use levy funds for shorter, modular training courses — not just full apprenticeships. This is significant for RACHP businesses needing targeted skills development in areas such as:

• Low-GWP refrigerants
• F-Gas compliance updates
• Digital diagnostics and smart systems
• Heat pump and hybrid technologies

This flexibility allows companies to upskill existing engineers without committing them to lengthy full apprenticeship programmes.

2. Faster Use of Funds

Levy funds will need to be used more quickly (within 12 months). Employers who do not strategically plan their workforce development risk losing funding.

For larger RACHP firms, this means skills planning must become a board-level conversation rather than an afterthought.

3. A Stronger Focus on Young People

Funding is increasingly prioritised toward early-career entrants. For the RACHP sector — where the average age of engineers remains high — this presents both a challenge and an opportunity. Businesses that proactively recruit apprentices now will be better positioned to address long-term workforce shortages.

What This Means Specifically for RACHP Employers

Addressing the Skills Shortage

The RACHP industry continues to experience shortages of qualified engineers. Environmental legislation, net-zero commitments, and new refrigerant technologies are increasing demand for highly skilled technicians.

The Growth and Skills Levy offers an opportunity to:

• Develop new entrants through Level 3 engineering apprenticeships
• Create progression pathways into specialist technical roles
• Upskill experienced engineers in emerging technologies

But this will only happen if employers engage strategically. Moving from Reactive Hiring to Workforce Planning

Historically, many RACHP businesses have relied on recruiting experienced engineers from competitors. This model is becoming unsustainable.

The reforms signal a clear direction of travel: employers must invest in growing their own talent pipeline.

This means:

• Partnering with colleges and training providers
• Engaging with local industry boards
• Supporting apprentices from recruitment through to qualification
• Mapping future skills needs around decarbonisation and digitisation

Those who fail to plan risk being left behind in an increasingly competitive labour market.

Financial Implications

For levy-paying employers, unused funds will expire faster. That makes proactive planning essential.

For SMEs in RACHP — the majority of the sector — co-investment rates remain accessible, but awareness and administrative support are often barriers.

Now is the time for businesses to:

• Review their digital apprenticeship account
• Audit current and future skills gaps
• Align recruitment with funding opportunities

Skills investment should be viewed not as a cost, but as a long-term commercial strategy.

The Bigger Picture: Growth, Productivity and Net Zero

RACHP sits at the heart of critical infrastructure — food supply chains, pharmaceuticals, data centres and sustainable heating systems.

The transition to low-carbon technologies means technical competency requirements are increasing rapidly. Without structured training routes, the UK risks slowing its net-zero ambitions.

The Growth and Skills Levy is intended to align skills funding with economic growth priorities. For RACHP employers, this creates a platform to modernise workforce development — but only if the sector actively engages.

A Call to Action for the Sector

Apprenticeship reform is not simply about funding changes. It represents a cultural shift toward employer-led, flexible skills development.

The businesses that embrace these reforms will build resilient, skilled workforces capable of meeting environmental and technological challenges ahead. Those that do not may find recruitment costs rising, talent pipelines shrinking, and growth constrained.

If you need support reviewing your apprenticeship strategy, understanding how the Growth and Skills Levy impacts your business, or shaping a long-term workforce plan, Our Education and Outreach Manager would welcome the conversation.

You can also engage directly through our Industry Skills Alliance events, where we bring employers, training providers and sector leaders together to shape the future of RACHP skills collectively.