DfE could step in if T Level fee hikes hit college budgets

Awarding bodies can charge colleges higher fees if gen 2 T Levels under-recruit

Awarding bodies can charge colleges higher fees if gen 2 T Levels under-recruit

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The skills minister has said Department for Education officials will consider intervening if controversial T Level fee hikes hit college budgets.

College bosses reacted angrily to plans – uncovered by FE Week in January – that would see them pay higher fees to awarding organisations if student numbers on the flagship qualifications were lower than expected.

The so-called “adaptive pricing” mechanism will be written into generation two T Level awarding body contracts, which are currently out to tender and come into force in 2025.

The move is part of attempts from the Institute for Apprenticeships and Technical Education to make T Levels more “commercially attractive” for prospective awarding organisations.

Major T Level awarding body NCFE wrote off over £2.5 million in its 2022/23 accounts due to lower-than-expected enrolments on its T Level courses.

David Hughes, chief executive of the Association of Colleges, accused the government of “undermining confidence in T Levels” following reports of the new adaptive pricing model in a letter to skills minister Robert Halfon.

Hughes wrote: “I am alarmed at the proposal we have seen in the tender documents and the potential impact on the T Level programme and on individual colleges.”

Adaptive pricing “transfers the risk away from government and awarding organisations onto the individual college pioneering the qualification”, Hughes added.

Students will be taking generation two T Levels in early years, construction and digital from September 2025, while the health and science T Levels won’t be ready for teaching until September 2026.

In his response to Hughes, seen by FE Week, Halfon said adaptive pricing was “part of continuing efforts to explore innovative mechanisms to ensure … a thriving marketplace for T Levels, which will result in greater competition and therefore ensure value for money for providers and for government”.

Halfon said Department for Education officials were “mindful” of the risk adaptive pricing poses to college budgets and would consider “whether any further action is needed to mitigate its impact” should it be triggered.

His reply stated that any intervention from the government would depend on the DfE’s T Level budget following the next spending review, which isn’t due until after the general election.

Halfon said: “I recognise that you and your members are concerned that if numbers do not materialise this could add funding pressure to college budgets – department officials are also mindful of this risk.

“Should we become concerned that adaptive pricing will be triggered, we will consider whether any further action is needed to mitigate its impact in the context of the overall funding settlement for T Levels.”

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