DfE claws back two thirds of £10m T Level employer incentive cash

Business representatives slam 'disappointing' underspend but officials claim some simply rejected the offer

Business representatives slam 'disappointing' underspend but officials claim some simply rejected the offer


Employers are calling on the government to raise awareness of the cash incentives available for T Levels after more than two-thirds of a £10 million industry placements fund went unspent.

FE Week can reveal that the Department for Education clawed back £6.75 million of the cash that was on offer from May 2021 to July 2022.

Employers could claim a £1,000 cash boost for every T Level student they hosted on a 315-hour industry placement. There were no stipulations about how the money should be used, but it was designed to aid set-up costs, buy additional equipment and train staff on how to supervise placement students.

The DfE told FE Week, through a Freedom of Information request, that the £3.25 million distributed under the scheme supported 3,241 incentive payments through 1,628 employers.

Business representatives said the figures were “disappointing” and blamed DfE officials for failing to properly promote T Levels to businesses and entice them to offer placements.

A similar scheme that ran from 2019 to 2021, which offered employers a payment of £750 for each T Level placement, suffered from the same problem and led to just £500,000 of a £7 million budget being spent. 

While this was during the Covid years, DfE researchers found examples of T Level providers and employers being “hesitant” to use the £750 grants because of the “risk that some of the funding could be claimed back, and also because of a lack of awareness of how the programme could be used”.

Robert West, head of education and skills at the Confederation of British Industry, said the latest employer incentive figures “highlighting high underspend are disappointing”.

He told FE Week: “The drivers behind this trend are clear: firstly, low awareness of available government support for business engagement, and secondly, a lack of clarity on the benefits of T Levels for firms.

“The government has made some progress on developing targeted information and guidance that explains the logistics around the work experience placement element. It is now necessary to highlight the value of T Levels for individual businesses.”

Jane Gratton, deputy director of public policy at the British Chambers of Commerce, said T Levels were “still quite a new phenomenon”. Her members say it can take up to a year for businesses to find out about schemes, five years to engage with them and 10 years to build confidence in their effectiveness. 

“With the impact of the pandemic and a host of other economic shocks to contend with as well, there are clear reasons why not every business has been able to get involved in T Levels,” she added.

‘We need to see better promotion’

One of the biggest barriers to the success of T Levels – the government’s flagship qualification launched in 2020 designed to be the technical equivalent of A-levels – is finding enough employers to host the mandatory 315-hour, or 45-day, placements.

Business bodies have long called for financial incentives to encourage employers to get involved.

Despite the low take-up of the incentive schemes in previous years, the government has created a £12 million T Level industry placement fund to be used in the 2023-24 financial year.

Employers can claim for costs up to a maximum of £25,000 across all placements they are hosting and through all providers they may be working with.

Federation of Small Business policy chair Tina McKenzie said: “Overall, we’re supportive of T Levels and do encourage our members to host placements, but they need to be better promoted – awareness among small businesses is still low. 

“We’ve called for the financial incentives to be brought back – an FSB report published in 2022 found that 22 per cent of small businesses would be encouraged to host a T Level placement if there was more financial support. So, we need to see better promotion and financial incentives, with a simpler way to access that.”

The DfE was approached for comment.

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  1. Alexandra Thomas

    One of the key things holding colleges back is the lack of sufficient staff to devote the immense time it takes to find businesses to take students in rural areas compounded by colleges choosing T Levels where there is scarce industry in their area in the first place.
    Money would be better spent on more non teaching staff to support these placements and route out employers.

    • Chloe Eastcombe

      Agreed on all counts! Our very small team struggle to support our ongoing Work Experience Programme alongside delivering quality Industry Placements across all relevant curriculum areas. It’s a difficult task! I would be interested to know the ’employers’ who helped write the T Level programmes – are they offering Industry Placements?