A summary of the current student finance system in England, who is involved in the system, and the main financial flows between them.
The Department for Education (DfE) plans to make A Levels and their new technical alternative, T Levels, the main further education qualifications at age 16 in England. They’ll sit alongside apprenticeships. Funding for other current post-GCSE options, including most BTECs, will be removed by 2025.
These reforms, announced on 14 July 2021, are part of wider Government efforts to overhaul the further education system, including provisions in the Skills and Post-16 Education Bill, which is currently before Parliament.
The reforms have been criticised for their perceived hastiness and the potential effect they’ll have on student choice and future opportunities.
This Insight gives background to the Government’s plans, explains the reforms and their implications, and summarises reaction.
What are level 3 qualifications?
Level 3 qualifications are mainly taken by young people after their GCSEs (level 2), but some are also funded for adults.
They include A Levels, T Levels (new, two-year technical courses equivalent to three A Levels), and vocational ‘applied general’ qualifications commonly known by their brand name, such as BTECs and Cambridge Technicals.
Most 16- to 18-year-olds pursuing a level 3 qualification in England are studying A Levels, but nearly a third are estimated to be studying an applied general qualification, in some cases alongside A Levels.
Level 3 qualifications can precede higher education qualifications at level 4 and 5 (such as higher national certificates and diplomas) and level 6 (bachelor’s degrees), as well as higher and degree apprenticeships.
Why does the Government want to reform the system?
As of July 2018, there were 4,000 level 3 qualifications eligible for public funding. Many were duplicates in the same subject, including over 200 different engineering qualifications.
Independent reviews of the further education system, commissioned by the Government in 2011 and 2016, found that qualification options were confusing for students and employers, and there were too many courses not adequately equipping students for skilled work.
The Government believes better qualifications are needed to address skills gaps and improve social mobility.
The two-stage consultation
Between March and June 2019, the DfE consulted on the principles that should apply to level 3 qualifications and below in England. The aim was to create “a more streamlined, simplified and ambitious technical qualifications system.”
Following the first stage of consultation, the DfE stopped approving public funding for new level 3 qualifications. It also announced the removal of funding from 163 duplicate qualifications and said qualifications with no or low enrolments would lose funding from July 2021 and August 2022 respectively.
The second stage of consultation launched in October 2020. It sought views on which remaining level 3 qualifications should continue to be funded alongside A Levels and T Levels. 80% of respondents disagreed with the central proposal to remove funding from qualifications that overlap with T Levels.
How will the new system work?
The Government will create two pathways for post-16 progression. The academic route centred on A Levels is intended to lead to further study. The technical route will mean T Levels become the main qualification option for young people wanting to enter skilled employment (that requires specialist training or expertise).
Other level 3 qualifications will need to demonstrate their quality and distinct purpose to continue receiving public funding, for example by meeting business and industry needs or leading to specialist higher education courses.
A reformed approval process also means the Institute for Apprenticeships and Technical Education will use employer-led standards to evaluate technical qualifications.
The Government hopes the reforms will remove “low-quality qualifications” from the system, and ensure students have confidence in the outcomes of their choices.
Reactions from further education
The further education sector is concerned that the new system will reduce student choice and accessibility.
The proposed speed of the reforms has also attracted criticism. Only 10 of the 24 planned T Levels will be available from September 2021, and adult learners are currently not eligible for these courses. The Association of Colleges has called for the defunding of qualifications to be paused until the T Level programme is more established.
Who is most likely to be affected?
The Government’s impact assessment acknowledges students from SEND (special educational needs and disability) backgrounds or deprived areas are disproportionately represented on courses at risk of losing funding, and that some might be unable to achieve a level 3 qualification in the future.
Research published by the Social Market Foundation in 2018 showed that students accepted to university from working-class backgrounds (based on National Statistics Socio-economic Classification occupational categories) and/or minority ethnic backgrounds are more likely to hold a BTEC qualification than their peers. The Foundation’s report (p18) said: “a quarter of Asian students (24%), just over one in five (22%) of mixed students, and 37% of black students were accepted to university after completing only BTEC qualifications at Level 3.”
Many universities believe removing funding for BTECs will reduce participation in higher education among disadvantaged groups.
When will changes happen?
T Levels are expected to be fully available across England by 2024/25. Funding will be removed from overlapping qualifications from 2023, and all academic and technical qualifications deemed superfluous to the new system will be defunded by 2025/26.
Criteria for the approval of reformed technical qualifications will be published later this year.
Further education funding in England, House of Commons Library, April 2021.
FE white paper: Skills for Jobs for Lifelong Learning for Opportunity and Growth, House of Commons Library, January 2021.
T Levels: Reforms to Technical Education, House of Commons Library, December 2019.
About the author: Joe Lewis is a researcher at the House of Commons Library specialising in further and higher education policy.
In the UK, higher education (HE) is a devolved matter and each nation has its own finance arrangements and student funding system. This paper outlines the student support systems for undergraduate higher education students in England, Wales, Scotland, and Northern Ireland. It sets out the amount of funding that students may receive and references recent debates and developments in HE funding across the UK.
Looks at the consultation on the 2017 valuation of the Universities Superannuation Scheme (USS) and the proposed reforms