Growth and Skills Levy Digital Courses 2026: Why Baseline Assessment Matters

From April 2026, employers across the UK will be able to use the Growth and Skills Levy to fund short courses in digital, AI, and engineering. The arrival of growth and skills levy digital courses in 2026 marks the biggest shift in how levy funds can be spent since the apprenticeship levy was introduced in 2017, and it opens the door to faster, more targeted workforce development.

But there is a problem hiding in plain sight. Without knowing where learners are starting from, providers risk enrolling people onto courses they are not ready for.

What Is Changing With the Growth and Skills Levy in 2026?

The Growth and Skills Levy replaces the old apprenticeship levy with a broader, more flexible funding mechanism. From April 2026, the first wave of levy-funded short courses (called "apprenticeship units" in England) will be available in three priority areas: digital skills, artificial intelligence, and engineering.

Skills England, the body that replaced the Institute for Apprenticeships and Technical Education (IfATE) in June 2025, will oversee which courses are prioritised and how the offer expands over time.

For training providers, this represents a significant new funding stream. For employers, it means access to shorter, more agile upskilling options that do not require a full apprenticeship commitment.

What Does the Growth and Skills Levy Fund?

The Growth and Skills Levy broadens what employers can spend their levy funds on. Under the old apprenticeship levy, funds could only be used for full apprenticeship standards. Under the new system, levy-paying employers can also fund:

• Accredited short courses in digital skills, AI, and engineering (the first three priority areas confirmed by the Department for Education)
• Full apprenticeship programmes (this remains unchanged)
• Modular qualifications that align to national occupational standards

The short courses funded through the levy must be accredited and approved by Skills England. They are designed to be completed in weeks rather than months, making them suitable for targeted upskilling without the time commitment of a full apprenticeship.

It is worth noting that the levy still applies to employers with an annual pay bill above £3 million. Smaller employers can access co-funded training through the national skills fund and the Adult Skills Fund, though the expanded co-investment arrangements under the new levy may give them additional options from late 2026.

Eligibility and Timeline

The Growth and Skills Levy rollout follows a phased approach:

• April 2026: First wave of levy-funded short courses becomes available in digital skills, AI, and engineering. Employers can begin drawing down levy funds for approved courses immediately.
• Summer 2026: Skills England publishes the expanded list of approved short courses and providers. Additional priority areas may be announced based on employer demand and labour market data.
• September 2026: The Lifelong Learning Entitlement launches alongside the levy changes, giving individuals a personal funding pot for modular learning throughout their careers.
• 2027 onwards: The range of fundable courses and sectors is expected to expand further as Skills England gathers data on uptake and outcomes.

For employers, eligibility is straightforward: any organisation paying into the levy (annual pay bill above £3 million) can access the full range of funded options. Non-levy-paying employers can access co-funded training, though the exact terms for short courses are still being finalised.

For training providers, the key requirement is that courses must be on the approved list maintained by Skills England and must meet the quality standards set out in the Education Inspection Framework.

The Readiness Gap No One Is Talking About

The government's ambition is clear: equip 10 million workers with AI skills by 2030. The free AI training programme announced alongside the levy changes underlines the scale of the challenge.

But here is the catch. Many of the adults who will be directed towards these levy-funded digital and AI courses lack foundational digital skills. Research consistently shows that around 11.8 million people in the UK lack the essential digital skills needed for everyday life, let alone for engaging with AI tools and data analytics platforms.

The UK Employer Skills Survey consistently finds that digital skills gaps are among the most common workforce deficiencies reported by employers. Yet many organisations plan to jump straight to AI training without first establishing whether their employees have the foundational skills to benefit from it.

Enrolling a learner onto an AI short course when they struggle with basic file management or email is not just ineffective. It risks wasting levy funds, damaging learner confidence, and producing poor completion rates that reflect badly on providers.

Why Baseline Digital Skills Assessment Must Come First

The solution is straightforward: assess before you enrol.

A proper baseline digital skills assessment reveals each learner's starting point across core digital competencies. It identifies not just an overall level, but the specific domains where a learner is strong and where they have gaps. This "spiky profile" is far more useful than a single score, because it tells you exactly what support each individual needs before they are ready for more advanced content.

For providers preparing to deliver levy-funded digital courses in 2026, baseline assessment serves three critical functions.

1. Right learner, right course

Not every learner referred by an employer will be ready for the same starting point. Some will be comfortable with spreadsheets and online collaboration but unfamiliar with data handling. Others may need foundational work on online safety before they can safely navigate AI tools. A diagnostic assessment helps you match learners to the right course, or identify prerequisite support that needs to happen first.

2. Audit-ready evidence from day one

Quality assurance is not going away. Whether you are delivering through the Adult Skills Fund or the new levy-funded short courses, you will need evidence of learner starting points, progress, and outcomes. A timestamped, adaptive assessment produces that evidence automatically, reducing admin burden while keeping you ready for inspection.

3. Better outcomes, better retention

Learners who start a course at the right level are more likely to complete it. They feel challenged but not overwhelmed. They build on existing strengths rather than struggling with prerequisites they were assumed to have. For providers, this translates directly into better achievement rates and stronger employer relationships.

What Providers Should Do Now

April 2026 is closer than it sounds. Providers who want to be ready to deliver levy-funded digital and AI courses should be taking practical steps now.

1. Audit your current initial assessment process. Does it cover digital skills at a granular level, or does it give you a single score with little diagnostic value? If you are still using paper-based tools or generic questionnaires, now is the time to upgrade.

2. Map your assessment to recognised frameworks. The levy-funded courses will align to national occupational standards and qualification frameworks. Your baseline assessment should map to the same frameworks (such as Pearson, NCFE, City and Guilds, BCS, or OCNLR) so that results are meaningful and comparable.

3. Build a pathway from assessment to enrolment. Assessment is only useful if it informs what happens next. Design a clear process where assessment results feed directly into learner placement decisions, and where learners who are not yet ready are offered foundational support before being enrolled onto advanced content.

4. Talk to your employer partners. Many employers will be eager to use levy funds for digital upskilling but may not understand the importance of baseline assessment. Position yourself as the provider who ensures their investment produces results, not just course starts.

How Baseline Assessment Fits Into Levy-Funded Delivery

Providers delivering levy-funded short courses will face the same quality expectations as those delivering apprenticeships. Ofsted's Education Inspection Framework applies to all funded provision, and inspectors will look at how well providers assess learners at the start, plan appropriate learning, and track progress.

For digital and AI courses specifically, this means providers need to demonstrate that they have assessed each learner's digital starting point before placing them on a course. A learner who is already confident with data handling and online collaboration needs a different pathway from someone who is still developing confidence with basic digital tasks.

An adaptive initial assessment that produces a domain-level profile, rather than a single score, gives providers the evidence they need. It shows which specific areas a learner is strong in and where they have gaps, enabling targeted course placement and personalised support from day one.

The Bigger Picture: Assessment as Infrastructure

The Growth and Skills Levy is one piece of a much larger shift in how the UK funds and delivers adult skills. The Lifelong Learning Entitlement, due to launch in September 2026, will give individuals a personal funding pot for modular learning throughout their careers. Skills England is actively expanding the range of approved courses and providers.

In all of these developments, one constant remains: effective skills development starts with knowing where each learner is today. Without that foundation, the most generous funding in the world will not close the skills gap.

The providers who will benefit most from the Growth and Skills Levy are those who can demonstrate a clear link between assessment, course placement, and learner outcomes. That chain of evidence starts with a robust baseline assessment.

Baseline digital skills assessment is not a nice-to-have. As levy-funded training requirements take shape in 2026, it is becoming essential infrastructure for every provider serious about outcomes.