The Education and Skills Funding Agency will stop any new qualification at level 3 and below receiving approval for funding from September next year.
Officials at the ESFA issued a “moratorium” notice to awarding organisations this week, which will be in place initially for a period of three years.
The move is part of the government’s controversial post-16 level 3 and below review of vocational qualifications, which includes applied generals such as BTECs, tech levels and technical certificates.
Officials claim that many of these qualifications are of “poor quality” and their existence leaves young people and employers “confused”.
A spokesperson for the Department for Education (DfE) said the moratorium will support this review, and will be enforced “so we are not adding to the already confusing and complicated system of over 12,000 qualifications already available at these levels”.
But Graham Hasting-Evans, group managing director at awarding body NOCN, warned of the economic consequences of the decision. “The announcement is not surprising,” he said.
“What I hope we will get very soon is a formal report from the Department for Education, not the ESFA, on the outcome of the [level 3 and below] consultation with the opportunity to comment on any firm DfE proposals, arising from the review.
“In that sense I believe that the blanket announcement of a moratorium, even with the exemptions, is not the best way forward for the UK economy as it could prove to be too restrictive.”
The moratorium will apply to study programme for 16 to 19-year olds, advanced learner loans, the adult education budget and the European Social Fund at level 3 and below.
Exemptions include qualifications that are being reformed, those that have been “designed to respond to a particular economic need” and those which have been approved for 2020 to 2021 but need updating.
The operation of the moratorium will be reviewed annually and will also apply across the Greater London Authority and six mayoral combined authorities, which had their share of the adult education budget devolved to them in August.
James Kewin, deputy chief executive of the Sixth Form Colleges Association, called the government’s level 3 and below review “important” and “high stakes” as it will determine the future of applied general qualifications.
Reacting to the moratorium, Kewin said: “As our consultation response set out, we believe that the newly-reformed applied general qualifications have a vital role to play in the future qualifications landscape, and should sit alongside T-levels and A levels as the ‘qualifications of choice’ for 16 to 19-year-olds.
“Applied general qualifications make an enormous contribution to both social mobility and economic growth and we will continue to make the case for this option to be available to students in the future.”
The ESFA stated that funding approval will not be removed from qualifications that have funding offers unless “they no longer meet approval principles, reach their operational end date during the period of the moratorium, and are no longer available for students to study” or are a “legacy version of a qualification that has been subject to other reform”.
The first part of a two-stage consultation on plans to withdraw funding for qualifications at level 3 and below begun in March and followed the announcement of plans to introduce new “high-quality” T-levels, which will be rolled out from next year.
Then skills minister Anne Milton told FE Week the consultation did not represent a manipulation of the market to ensure T-levels are a success and claimed those providing high quality, necessary qualifications with a clear purpose and good progression “should have nothing to fear”.
However, Ofqual voiced concerns that there was a risk of a potential barrier to student progress if alternative choices to T-levels and A-levels were “unduly restricted”.
In July it was confirmed that more than 160 “duplicate qualifications” at level 3 and below, including 76 BTECs, will have their funding removed from August 2020.
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