Apprenticeships are to be funded through employers, Skills Minister Matthew Hancock announced at the Association of Colleges (AoC) conference on Tuesday.
Mr Hancock said the move was part of a wider strategy to reform the FE system “to support high expectations”.
“That includes… putting the funding for apprenticeships through employers so they can demand the high quality training they need,” he said.
The announcement comes before the results of the recent consultation on apprenticeships funding have been released.
The consultation asked whether money for apprenticeships should be routed through colleges and training providers or employers, or funded through the tax system.
Mr Hancock’s announcement came shortly after AoC president Michelle Sutton criticised employer providers in her speech to the conference.
Mrs Sutton pointed to recent inadequate Ofsted grades received by hotel chain InterContinental, where no apprentices had achieved their qualification since the scheme started in 2012, and security contractor G4S.
She said: “If we compare this year’s marked improvement for college Ofsted outcomes, to some employer-led apprenticeship outcomes, I think there should be some questions to ministers around the fitness for purpose for some large employers to be a lead position in the new employer-led landscape.”
Shadow Skills Minister Liam Byrne also urged a cautious approach to introducing employer ownership of funding.
“A lot of big talk is talked about employer ownership and the government, in my view, is not very clear about what it means,” he said.
He acknowledged the importance of employer ownership of the skills framework in the creation of “gold standard vocational qualifications”.
“I think it’s not a bad idea to experiment with giving employers direct ownership of some of the funding,” he said.
“But we have to proceed with incredible caution, because firstly you have to ensure that the skills people are being trained in are genuinely transferable.
“Secondly you’ve got to make sure there all the right safeguards against fraud and thirdly you have to make sure this is actually going to work for regional economies.”
He also warned that there could be issues with setting up new systems to accommodate funding for employers.
“We should be innovative and test new things, but we have to be incredibly careful,” he said.
“Everything we have learned about the fiasco which is universal credit tells us that wiring big government IT systems together is immensely difficult. We can’t risk another universal-style debacle on skills funding.”