A cash incentives scheme to encourage employers to provide T Level industry placements flopped with nearly half the funding allocated clawed back, FE Week can reveal.
Freedom of Information data from the Department for Education shows officials recouped over £3.9 million of the £8.5 million dished out through the one-year T Level Employer Support Fund available from April 2023 to March 2024.
The Confederation of British Industry complained the “concerning” high clawback rate suggests roll out inefficiencies and called for “clear and easy funding” to help businesses step up to the task.
While cash incentives appear to have been officially retired, the DfE recently relaxed rules for T Level work placements to allow for hybrid and remote working in a bid to boost student numbers.
The DfE launched the £12 million Employer Support Fund in early 2023 as an opt-in scheme offering incentive payments of up to £25,000 for businesses hosting industry placements for 12 months from April 2023.
The flagship T Levels qualification includes a mandatory 45-day industry placement with an employer.
The FOI figures, obtained by FE Week, revealed £8.5 million was handed to 273 training providers whose payments were based on their T Level student numbers.
A total of 1,243 employers then made claims to the fund.
Guidance for providers stressed employers could only claim for “legitimate costs” for providing an industry placement and could not profit from the cash.
Legitimate costs referred to administrative costs such as physical workspaces, and tangible costs including equipment and insurance.
Employers were required to submit a declaration form including basic information about their business and the costs they were claiming for, though they were not asked to evidence claims.
Providers were responsible for everything else: validating claims from employers, making the payments to businesses either once a start date was agreed or a placement began, and then reporting back the claims paid out via a DfE online tool.
The DfE clawed back any unclaimed funding from providers and recouped £3,959,786 in August.
Rob West, head of education and skills at the Confederation of British Industry, said: “The high clawback rate is concerning as it suggests inefficiencies or overly stringent rules that prevent employers from fully benefiting from the funds.
“T Levels have struggled to gain full buy-in from employers, who want to be involved in the creation and development of solutions, rather than just delivering a pre-determined ‘answer’ from the government.”
Business groups are still pressing for some form of incentive despite previous iterations of the fund also failing to attract support.
A £10 million incentive fund handing out £1,000 payments between 2021 and 2022 resulted in a £6.75 million clawback, while a £7 million scheme giving £750 for each placement running from 2019 to 2021 resulted in just £500,000 being spent.
The Federation of Small Businesses rehashed previous calls for £1,000 payments to be reinstated.
Tina McKenzie, FSB policy chair, said: “For T Levels to be a success, we need sustained, clear and easy funding assistance to be in place, which is then promoted well to raise awareness amongst small firms, allowing them to plan ahead and create new placement roles.”
A government frequently-asked-questions page on T Level industry placements says the Employer Support Fund (ESF) was always meant to be a one-year fund as it found “the majority of employers are able to host the placements without the ESF”.
It adds: “Overall, the ESF has proven to be a valuable way of testing employer need and we will be monitoring the evidence from the pilot to inform any future support offer.”
Julian Gravatt, deputy chief executive of the Association of Colleges, said T Levels were “making a real difference” in colleges for around 29,000 current students, but securing placements with employers “has always been a challenge”.
He added: “There continues to be a case for targeted support for employers who are small or who are involved in priority sectors but perhaps part of a wider DfE employer engagement strategy involving programmes outside T Levels.”
The Department for Education was approached for comment.