Skills England scales back employer role in funding decisions

Skills England has announced it will no longer rely on employers when deciding funding levels for apprenticeships.

The agency today said it was implementing an “interim funding model” that it claimed would be “more responsive” and “enable faster, more consistent decisions”.

Skills England currently invites “occupational groups”, made up of employers, to submit their own costings, which are then balanced with the agency’s funding rates created using an independent evidence base and Office for National Statistics data.

But rather than asking occupational groups to supply quotes from assessment organisations, the agency will now make use of “actual assessment cost data to help set our estimate”.

“We may continue to ask occupational groups for advice and to offer on-programme costings where needed,” the agency added.

The interim model will be in place for the rest of 2026 at least, with a permanent new funding model to be tested this summer.

It comes days after skills minister Jacqui Smith instructed Skills England to urgently review apprenticeship funding bands with a view to uplift some rates to grow the number of people aged under 25 starting apprenticeships. Skills England must identify priority standards by July and recommend potential new funding rates by October.

‘Sensible step’

Simon Ashworth, deputy CEO and director of policy at the Association of Employment and Learning Providers, said the membership body agreed that the funding band review model needed a refresh.

“The current process has been too slow, with some of the most popular apprenticeship standards for young people not having their funding bands reviewed since they were introduced in 2017,” he told FE Week.

“Making greater use of actual delivery data is a sensible step, and Skills England has previously indicated it wanted to move away from a quote-based approach as apprenticeship assessment reforms take effect, so this change is not unexpected.”

Skills England’s funding model change applies to all “skills products” within its remit, including apprenticeships, apprenticeship units and foundation apprenticeships.

The agency, which is the successor to the Institute for Apprenticeships and Technical Education, has not disclosed which datasets or calculations underpin its interim model, other than “actual assessment costs”, or whether employers will be able to challenge its decisions.

It did reveal that the agency “may” seek advice from its expert network, made up of occupational and sector stakeholders, before making a final recommendation through its “internal governance processes” and then approaching the work and pensions secretary for approval.

The guidance outlined scenarios where funding for a skills product would be reviewed. These included instances where there is a significant change in duration, the addition or removal of a mandatory qualification or significant changes in content.

Ashworth added: “Getting funding band decisions right is essential and we will continue engaging closely with Skills England as the new model develops.

“There are still wider concerns that need addressing though, including the longstanding £27,000 funding band cap, which continues to affect the deliverability of provision in some of the government’s priority sectors. It is also too early to judge how assessment reform will affect future funding bands, but this is something we will be watching carefully.”