Ofsted to ditch one-word ratings for FE in September

Overall effectiveness grades will be ditched from FE and skills inspections in September, one year after the “low information, high stakes” Ofsted judgments were axed for schools. 

A senior inspector told the Association of Employment and Learning Providers autumn conference this week the watchdog needed the extra time because “FE is a little more complicated”. 

Paul Joyce, Ofsted’s deputy director for FE and skills, told delegates: “We are part of the accountability system, so our actions need to take account of the whole system. 

“You will know, contract management and all sorts of other decisions DfE make are based on that grade. So we can’t lose the grade overnight. Our intention is it will go from September 2025.” 

Several private providers have faced contract termination by the Education and Skills Funding Agency in the last year following ‘inadequate’ Ofsted inspections, such as Derby Skillbuild and Salford and Trafford Engineering Group Training Association Ltd. 

“[An inspection] matters to you, particularly to providers in this room, because it may well be your business and your livelihood, and the consequences of a poor inspection might be very, very significant,” Joyce said. “There isn’t an inspector that doesn’t know that.” 

Joyce also alluded to a consultation in the new year taking forward Ofsted’s Big Listen reform proposals, such as new tailored inspection frameworks and report cards. 

Longer notice periods for inspections could be part of those reforms, he hinted. 

The deputy director said: “You wanted longer notice periods for providers, and we’ve listened. We’ve heard that, and we’ll respond in due course.” 

The Big Listen was launched in March and sought feedback on inspection reform following the death of headteacher Ruth Perry. 

Joyce confirmed that Ofsted will be commencing a formal consultation with the sector early next year to examine its proposals “properly”.

Cash-strapped WCG stung by ‘significant’ clawback

A college group said its recovery plan will ensure an “even brighter future” despite it facing a £1.4 million funding clawback and the refinancing of a £4.7 million loan.

Warwickshire College Group (WCG) this week published its annual accounts 10 months late due to an audit by the Education and Skills Funding Agency (ESFA).

Its financial statements reveal WCG is in “dispute” with the agency over a “significant clawback” of up to £1.4 million for 2022-23, with a risk of further clawbacks from claims made in earlier years.

It comes a month after the FE Commissioner placed WCG in financial intervention due to “serious cashflow problems”.

But the college remains optimistic about its “positive future”, thanks to a “strong recovery plan” and new leadership team led by chief executive officer and principal Sara-Jane Watkins.

Debt prompts intervention

Pressures that led to an ‘inadequate’ financial health rating for 2022-23 included a deficit of £1.3 million on an income of £51 million, an outstanding loan of £4.7 million from Lloyds Bank and the ESFA clawback.

The ESFA clawback means the college group has also breached the terms of its loan, which must be refinanced by the Department for Education ahead of its 2027 final repayment date.

Reason for clawback kept secret

The ESFA commissioned auditors from Mazars to investigate the college’s funding claims last year, with a final report issued in May.

FE Week understands £1.1 million of the £1.4 million clawback relates to apprenticeship provision but the college did not respond when asked for details.

An ESFA spokesperson confirmed it had no plans to publish the auditor’s findings as the probe was not classed as a formal investigation.

They declined to comment on WCG’s case as it relates to an individual college.

Proud of progress

Watkins said: “We are proud of the significant progress made in reducing our debt over the years, allowing us to continually invest in first-class facilities.

“Our recent student recruitment success and our exciting new initiatives demonstrate our commitment to evolving and meeting the needs of young people and the communities we serve.

“We are excited to continue working with the DfE on our financial recovery plan and look forward to an even brighter future.”

The college group is responsible for about 13,000 students, including more than 2,000 apprentices, and has 1,300 staff across six colleges in Warwickshire and Worcestershire.

It’s made up of Evesham New College, Warwick Trident College, Rugby College, Royal Leamington Spa College, Moreton Morrell College and Pershore College.

Selling assets

To reduce its liabilities WCG has sold sites since its commercial debt peaked at about £23 million in 2014.

These include its old Rugby College site for £7.6 million, the controversial sale of its Henley-in-Arden site to Wasps Rugby for £6.5 million, and the sale and leaseback of accommodation blocks in Leamington for £5.2 million.

WCG also hopes to make a further £8 million from future sales, including the former Malvern Hills College building which it won permission to sell following a court battle with Malvern Hills District Council.

According to the college group, a specialist education provider is planning to take over the site “which will ensure it continues to serve the community with valuable training and educational resources”.

£300m of adult education lost in post-pandemic underspend

National adult education budget underspends totalled almost £300 million over the last four years, figures show.

The repeated underspends in non-devolved contracts account for between 7 and 16 per cent of the total budget available each year.

The highest underspend was recorded in 2021-22 when £115 million was left over, according to a response to a Parliamentary question this week.

For the past two academic years underspends hit £80 million and £43 million respectively.

Of an overall budget of £2.6 billion between 2020 and 2024, the underspend totalled £292 million.

Alex Ford, chief executive of CT Skills, one of 55 independent training providers that won a procured AEB contract in the government’s latest tender, said underspends were fuelled by learner behaviour and demand that had “changed dramatically” since the pandemic.

He added: “Employment levels surged and learners increasingly wanted to work and learn more flexibly.

“Colleges and training providers have had to adapt delivery models to meet the demand for more flexible, modularised learning which draws down less funding than long, intensive programmes in classrooms.”

The Department for Education declined to comment on reasons behind the underspend or reveal where the funding ended up going. FE Week understands underspends are usually returned to the Treasury.

A longstanding problem

Julian Gravatt, deputy chief executive at the Association of Colleges, said “complexity and underfunding” of adult education budgets had been a longstanding problem that contributed to underspends in the 2010s.

Covid-related closures resulted in a shift to online learning, but also led to significant underspends in 2019-20 and 2020-21, he added.

No figures were released that broke down the underspend by colleges and independent training providers (ITPs).

In 2023-24 ITPs accounted for only £75 million of the adult skills fund, which was allocated to 55 providers across non-devolved areas of England. The rest is grant funded to colleges.

Complete figures are not available for devolved authorities such as the Greater London Authority or the Greater Manchester Combined Authority, which have controlled their portion of the budget since 2019.

‘Hugely disappointed’

Brenda McLeish, chief executive officer of Learning Curve Group which is taking the DfE to court over rejected bids for the 2023-24 adult education budget contract, said she was “hugely disappointed” to see the “massive” underspend.

She told FE Week: “Trusted providers delivering outstanding provision have lost out to providers who aren’t delivering.”

McLeish added she was “puzzled” by the DfE’s decision to recontract procured allocations for a second year recently “at the same quantum with the same contractors that under-delivered in previous years”.

She said colleges had “historically struggled to spend their full allocation and worked with strategic partners through subcontracting to utilise this” but the government’s 25 per cent cap on subcontracting had “restricted this and exacerbated the underspend situation”.

Skills consultant Aidan Relf said: “I’ve always struggled to come to terms with the sector complaining about the halving of the adult budget over the last 14 years when it regularly hasn’t been able to spend what it has been allocated, and that goes for the devolved budgets as well.

“My understanding is that the Treasury struggles with it too.

“The way future funding is allocated across England requires fundamental reform and this includes a return for individual learning accounts as the Blunkett skills commission advocated two years ago.”

We’ll lose apprentices due to Reeves’ tax and wage rise, say bosses

Bosses have warned the chancellor’s budget tax hikes and rises to the minimum wage will wreck their plans for new apprentices.

Rachel Reeves vowed to rebuild public services as she announced £40 billion in tax rises last week, which included increasing employer national insurance contributions by 1.2 percentage points.

She also announced that from April the national living wage will rise 6.7 per cent from £11.44 to £12.21 an hour, while the apprentice minimum wage goes up 18 per cent to £7.55 an hour.

Business secretary Jonathan Reynolds admitted the increases were likely to impact companies’ ability to hire new staff.

An FE Week investigation has found early signs that apprentices are either being let go or recruitment is being put on hold in industries including hairdressing and early years.

A snap survey by the British Hair Consortium (BHC), shared exclusively with FE Week which gathered responses from 1,600 hair salon owners employing a total of 3,277 apprentices, suggested 95 per cent will now cut back on hiring to save money.

When asked how apprentices’ minimum wage increases would impact their apprentice plans, more than half said they would freeze hiring, and another quarter said they were likely to reduce their current headcount.

‘It’s not appealing’

Brooke Evans who runs BE Ironbridge, a hairdressing salon in Telford, Shrops, said it was now “very unlikely” she would take on further apprentices.

She added: “Other salons I’ve spoken to are unlikely to take on more because it’s not appealing.”

Evans has two apprentices working alongside seven stylists and estimates she has trained 10 apprentices in the last five years.

She said: “The increase in wage baffles me for apprentices because you put in so much time to get them to the right standard.

“They might qualify in two years, but we invest in them for six to 12 months to refine their skills enough.”

Employers in the early years sector also said the budget is likely to hit their hiring plans.

Lisa Evans, manager of Abacus Nursery and Childcare, recently hired two 16-year-old level 2 apprentices.

But she said: “Due to the announcements in the budget and the lack of appropriate funding, I will potentially only be able to offer them their level 2 and not be able to support them through to their level 3 as the rising costs will affect my sustainability within the setting.”

Budget detail

Under Reeves’ plan, employer national insurance contributions will rise from 13.8 per cent to 15 per cent and the salary threshold where contributions begin will fall from £9,100 to £5,000.

Meanwhile, the employment allowance for small businesses, effectively a discount on the overall national insurance bill, will increase from £5,000 to £10,500.

Employers also do not pay national insurance for apprentices under the age of 25 who earn up to £50,270 a year.

Wage rises positive ‘in theory’

Neil Leitch, chief executive officer of the Early Years Alliance, said that while “in theory” rises to minimum wages is positive news, combined with higher employer national insurance contributions it is “increasingly difficult” for businesses to remain viable.

Amy Alderson, director of early years specialist Aspire Training Team, which has more than 300 apprentices, said wage and national insurance increases “are posing a real challenge” for businesses.

She added: “As costs increase it’s crucial that employers remain committed to supporting apprenticeships, particularly in sectors like early years education where there’s already a staffing shortage.

“Scaling back on apprenticeships for short-term cost savings will ultimately harm the sector’s stability and growth, leaving both employers and the communities they serve at a disadvantage.”

Bad hair day

Toby Dicker, co-founder of the Salon Employers Association, whose members took part in the BHC survey, said salons were moving away from taking on apprentices “because there’s literally no money left”.

He argued that rising costs have pushed two thirds of the sector’s workers into the self-employed “gig economy”, meaning there are less employers who will take apprentices on a PAYE basis.

He added: “Any service-based industry is harder hit, but hairdressing more so because the apprentice doesn’t add any value initially.

“If you’re an apprentice painter or electrician or plumber, you can at least pass the tools and do those things.

“But an apprentice hairdresser is learning, they’re a student as far as we are concerned, but yet they’re regarded as workers by current administrations and government.

“A generation of employees will be gone – that’s what those numbers are telling us.”

Other sectors?

Apprentice training providers suggested employers in other sectors were also cutting back on hiring plans, but none were willing to go on record.

Luke Muscat, managing director of training provider B2W Group, said he had spoken to several senior leaders in industries such as insurance, IT and hospitality, who were considering “reducing hiring plans, recruitment and pay freezes, increasing automation and technology”.

He added: “They were not specifically against apprentices, but I think it will be young people and apprentices that find it hardest to compete as employers tighten their belts.”

Journey’s not over for skills bootcamps, says top DfE official

There is “definitely a future” for skills bootcamps, a top Department for Education civil servant has said following uncertainty about funding for the courses.

Apprenticeships director Kate Ridley-Moy told the Association of Employment and Learning Providers autumn conference that the programmes could potentially “evolve” into a fundable option through the reformed growth and skills levy.

The previous government committed half a billion pounds to fund skills bootcamps between 2022 and 2025. The short courses involve a combination of training, work experience and a guaranteed job interview over a period of up to 16 weeks.

While there have been no commitments to fund bootcamps with public cash beyond March, Ridley-Moy outlined a positive road ahead for the providers who deliver them.

She said: “There definitely is a future for skills bootcamps.

“We’re also thinking about how, in a reformed growth and skills levy, there is a call for shorter courses for employed people. So actually, it’s a great way to look at bootcamps and potential evolution of it.”

Ridley-Moy added skills bootcamps had proved a “huge success” but recognised there were “some areas” where the delivery and outcomes “can be improved”. Research of the early rollout of the programme found low completions and concerns over the “appropriateness” of some job interview offers.

Autumn 2025 aim for foundation apprenticeships

The civil servant also gave an update on the government’s commitment to introduce “foundation” apprenticeships.

Chancellor Rachel Reeves announced £40 million at last week’s budget to develop the courses.

Ridley-Moy said more information will come in the spring and the aim is to roll out foundation apprenticeships next autumn.

She acknowledged there had been “lots of previous offers” designed to deliver opportunities for those not yet ready to undertake apprenticeships, namely traineeships, but insisted “we are learning the lessons from our design and from some of the problems that we’ve encountered in the past”.

She added: “As jobs with training, the new foundation apprenticeship offer will start with the need of employers as well as the needs of young people. It will focus on ensuring that training is directed towards real vacancies and staff-shortage areas. The training offer will include clear, seamless progression into other apprenticeships.”

Ridley-Moy also said a timeline for implementation of the growth and skills levy should be communicated in the new year, as should final decisions on which level 7 apprenticeships will be removed from the scope of levy funding.

£300m budget boost ‘can’t pay for 5.5% FE pay rise’, AoC claims

Colleges will find it “impossible” to use the £300 million additional funding being pumped into the sector to match the school teacher pay award, leaders have claimed.

Chancellor Rachel Reeves announced the cash injection at last week’s Budget, but details on how the funding will be distributed and what it should be spent on have still not been released.

Unions were quick to insist the money must be used to fund a 5.5 per cent pay rise for college staff that matches what schoolteachers will receive in 2024-25.

Schools got £1.2 billion of government cash over the summer to cover the costs, but colleges received nothing.

The Association of Colleges previously said £250 million was needed to match this pay award in FE.

But the AoC claims the £300 million announced at the Budget will be spent on other priorities like projected demographic increases in 16-to-19 students, partly because the cash is expected to be released in April – the next financial year.

AoC chief executive David Hughes posted on social media to say colleges will see “none of it before then, making it impossible, sadly, to match the school pay award in this academic year”.

He later told FE Week: “There seems to be some misunderstanding that the extra funding will be able to help colleges to match the school teacher pay award announced in July. That looks highly unlikely, given that the extra funding announced is for the financial year starting in April 2025, and the schoolteacher pay award is for the academic year already started.”

The previous government stumped up an additional £185 million in 2023/24 and £285 million for 2024/25 through the 16-to-19 funding formula to help fund college pay rises in those years.

The AoC made a recommendation of a 6.5 per cent uplift for college staff pay in 2023/24, in line with what schools got, but only recommended a 2.5 per cent pay rise in 2024/25.

University and College Union head of further education Paul Bridge said colleges “know they are getting an overdue funding boost” and should “manage their budgets to prioritise giving hard-working staff a proper pay-rise now”.

He added: “Many further education lecturers are using foodbanks and rationing their heating, so for college bosses to follow the AoC’s suggestion and continue to hoard their resources instead of supporting staff would exacerbate the already parlous staffing situation. 

“Last year the Tories made clear their £470 million funding boost was to support staff recruitment and retention; at the very least the Labour government now needs to mirror that directive for colleges to prioritise staff. If the AoC and college bosses keep on holding down pay, then the sector will continue to haemorrhage workers.”

Hughes outlined that some of the £300 million will be “required to fund places for the growing cohort of young people who have a statutory right to education or training to age 18”.

He added: “We will all soon know more about what the growth has been in colleges and school sixth forms in this current academic year, and because of lagged funding that will drive how much of the extra £300 million of funding is required for the next academic year and how much might be able to support other priorities including a funding rate rise.”

Today the National Education Union closed a ballot for strike action in 40 sixth form colleges also excluded from the schoolteacher 5.5 per cent pay rise over the summer.

Daniel Kebede, the NEU’s general secretary, said his union “expects appropriate funding to be given to colleges to enable pay settlements that match those in the maintained schools sector”.

The outcome of the ballot is expected to be announced in the coming days.

The Sixth Form College Association said that “most” of the £300 million will be “needed to fund the projected increase in the number of students”.

Chief executive Bill Watkin told FE Week: “It remains the case that there is a pressing need to raise the rate of 16-to-19 funding to provide students with the education and support they need to fulfil their potential, and to ensure that staff in sixth-form colleges receive the same pay increase as their colleagues in schools and academies. 

“£300 million is not enough to fund this, and the bottom line is the government needs to invest significantly more in 16-to-19 education to ensure that both students and staff get a fair deal.”

Skills minister Jacqui Smith told this week’s Association of Employment and Learning Providers conference that the Department for Education is now in a “business planning process” to decide how to allocate the £300 million.

The DfE said details will be released “in due course”.

Labour must end the scandal of FE teacher pay

Planning lessons? Check. Curriculum development? Check. Assessment for Learning? Check. Manage behaviour effectively? Adherence to the teachers’ standards at all times? Most definitely.

We’re all expected to demonstrate the same knowledge and skills, so why is there such a huge disparity in pay between teachers in schools and those in FE colleges?

Much of the problem stems from colleges themselves. Job descriptions for Maths and English teachers are often vague, stating, for example, that is desirable for a candidate to have or be working towards a teaching qualification – without clarifying whether this is QTS, QTLS, or something else entirely.

This enables colleges to pay the absolute minimum, because they do not have to employ a teacher with QTS and therefore pay them to scale. Those who are attracted to the more laid-back environment that college life promises after school burnout take a financial hit if they decide to make the switch.

It happened to me, and it has happened to many others.

While schools in the state sector have to follow the pay scales set by the DfE, with most academies and many independent schools also choosing to, FE colleges can set their own levels.

The UCU has recommended pay levels, which are shockingly far below those of schools, but colleges can choose to ignore even these. Essentially, they operate as private businesses and pay what they want.

It’s unsurprising, really. The 2010 coalition government and the successive Conservative governments that followed it battered sixth form and FE colleges with severe funding cuts, resulting in redundancies, courses stopped and some colleges closing.

In essence, these governments did not see the value of post-16 education, refused to properly invest in them, and colleges have never financially recovered. Those who have absorbed the brunt of this brutal financial battering are the teachers in these organisations.

A career in FE is no longer financially tenable

One particular effect of this policy climate has been the devaluing of many teaching staff by renaming them ‘lecturers’. By doing so, colleges are able to introduce an element of the casual university employment market, where lecturers are often employed on a zero-hours basis, and are only paid for the hours they teach.

Many maths and English teaching positions in colleges are now advertised on a per-hour basis. These often go unfilled, thus perpetuating recruitment problems. Meanwhile, those who do accept these zero-hours terms often find their hours being drastically cut at short notice, meaning that a career in FE is no longer financially tenable.

We can’t pretend this doesn’t affect students too. Constantly changing teachers, some of whom are qualified subject specialists and many of whom are not, does not help them pass their resits.

Reinforcing this devaluing of FE teachers is the idea that we are facilitators rather than teachers. No, we are not. Students often need to be explicitly taught the Pythagoras theorem, or need scaffolding and modelling to even attempt extended writing.

This is teaching. Any other name is just a way of deskilling us so that we can be paid less. Let’s see it for what it is and not give in to it.

This situation is exacerbated by decisions relating to teaching and learning, along with recruitment, being made by heads of departments who themselves are not subject specialists.

For example, it is fairly common for a head of maths to have a vocational background, or for a head of English to be ESOL-trained but not hold a PGCE in English (or even in some cases, QTS of any kind).

The new Labour Government must stop burying their head in the sand about the pay and recruitment crisis in FE. They have listened to the NEU and the STRB. Now, they must listen to us:

  • Create enforceable pay scales similar to those in schools.
  • Only use qualified teachers to deliver GCSE maths and English courses.
  • Ensure heads of departments are subject specialist.
  • Talk up the hard but often unseen work that college teachers do.
  • And invest in a diverse range of courses that inspire students to pursue their goals.

Labour’s economic mission relies on skills, and those depend first and foremost on skilled teachers. This isn’t a mission that can be delivered on the cheap.

Labour can do much better than simply tweaking the levy

There is considerable focus on the way Skills England will be set up, including what will happen to the functions of IfATE. Whoever leads the new body needs to set out a clear vision for a world-class skills system with an associated road map for delivery.

To succeed and be around for the long-term, Skills England will need leadership with the clout to influence the whole of government, not just a sponsoring department.

However, even more important is the new government’s plans for the growth and skills levy. How it will choose to use the money available to grow the talents and opportunities of our workforce will be critical to the economy and lifting the UK’s poor productivity.  

The new levy will be critical to all five of the government’s five missions to rebuild Britain.

Since the 1960s, the UK has had numerous forerunner levies in one form or another, including in construction and related engineering for companies of all sizes.

These have been run and adapted over time by industry and sector skills councils, generally with success. A more recent and more familiar example is the apprenticeship levy introduced in 2017.

Employers complained that the apprenticeship levy focused only on large firms, lacked flexibility and was over-bureaucratic. So the growth and skills levy presents a rare opportunity for the government to really “put the employer in the driving seat” through a new sector-led approach.

Drawing lessons from historical industry levies which have proven effective over six decades and from devolution policies, we suggest industry groups oversee the new levy’s implementation, while the government focuses on collecting funds and setting regulatory frameworks.

This approach would emphasise local input, collaboration with the UK’s devolved nations and regions, and set clear skills outcomes aligned with technological advancements, AI, and net-zero goals.

This approach would emphasise local input

Sector-specific strategies would also ensure inclusivity for SMEs and the self-employed, with a commitment to leveraging experts in new technologies for workforce training, including partnering with further education colleges.

There could be a structured sector deal or sector license with five-year renewable terms, promoting strong governance and an industry-wide commitment to skills development.

The overarching goal is to place responsibility for skills upgrades in the hands of industry professionals, who can better respond to real-time economic demands, technology shifts and the move to net zero.

Skills and productivity improvements will involve considerable commitment and contributions from local government in England and the administrations in Northern Ireland, Scotland and Wales. Their engagement must be integral to the way forward.

So, what might be the underpinning conditions of a sector deal or license? Here are five key considerations:

First, clear outcomes for the delivery of the skills needed for sustainable economic growth and productivity improvements and for upgrading businesses and workforces (including SMEs and the self-employed) for new technologies, AI and net zero.

Second, an industry-developed national sector skills strategy for the whole of the sector including SMEs and the self-employed.

Third, strong governance through a sector leadership group that looks at sector strategies as a whole, including the skills requirements. This is essential, and the governance organisation must be able to take the whole of the sector with it.

Fourth, close working with devolved authorities to support the differing priorities and needs of each locality.

And fifth, a commitment from the sector to utilise the skilled people who are at the cutting edge of introducing the new technologies, AI and net zero skills to support training and occupational standards development.

Instead of assuming all that will happen is tweaking of the existing apprenticeship levy, let’s start a real debate about what the growth and skills levy should look like and how it should be governed and operated.

The above proposed approach puts responsibility where it really rests and in the hands of the people who can truly implement the changes in skills that the UK’s economy desperately needs. 

All level 7 apprenticeships will be axed, skills minister suggests

The axing of level 7 apprenticeships from levy funding will be “pretty widespread”, the skills minister warned as she suggested a blanket ban on public subsidy for the programmes is coming.

Jacqui Smith addressed apprenticeship levy reform concerns in her speech at today’s Association of Employment and Learning Providers conference, in which she also defended the “independence” of incoming quango Skills England.

Prime minister Keir Starmer announced plans to remove some level 7 apprenticeships from the scope of levy funding to shift resources towards young people training at lower levels during Labour’s party conference in September.

It comes amid strain on the Department for Education’s already stretched apprenticeship budget which has been almost fully spent in the past two years.

Smith said today: “In order to open up the growth and skills offer to deliver new training where it’s needed most, you will be aware that we’ll be asking more employers to step forward and to fund level 7 apprenticeships outside of the levy.

“We know that for too long employers have not invested enough in skills, and that’s something which needs to change. We’re clear that levy funded training is only one element of the investment from employers in the skills needs of their workforce, and we want to encourage and support employers to go further in investing in these training needs as we build towards that responsive and collaborative skills system.”

Level 7 apprenticeship starts are dominated by the accountancy or taxation professional and senior leader standards. But other popular programmes include advanced clinical practitioner, solicitor, academic professional, chartered town planner, district nurse and community nurse specialist practitioner.

Some sector leaders have praised the decision as it removes so-called “deadweight” costs – paying for training that would have happened anyway in the absence of the levy.

But other training providers, universities and employers fear that removing all level 7 apprenticeships from the levy will disproportionately hit the NHS, schools, councils and the civil service which often spend their levy on these apprenticeships.

Pressed on whether the DfE and Skills England will engage with the sector on potential areas to keep in scope of the levy, Smith said this will happen but suggested it is unlikely any standards will survive as the removal of funding “will be pretty widespread”.

She said: “We absolutely need to hear the evidence, the examples, exactly that type of information about where we might be able to make some changes to enable us to make these decisions.

“I just don’t want in six months’ time for people to say I wasn’t honest. We are going to have to shift funding from level 7 in order to be able to fund the other priorities that I have set out. I wouldn’t want people to leave this room with an impression that there will be a lot of flexibility around that.”

Asked directly if this means all level 7 will be cut, Smith replied: “More than some people hope, I suspect.”

AELP has argued the level 7 axe could be avoided if the £800 million gap between the amount taken in by the apprenticeship levy from employers and the actual programme budget was plugged.

Smith said she has “made this point to the Treasury”.

Skills England independence fears ‘wrong’

Labour consistently claimed in opposition that its proposed new skills body, Skills England, would work across government to fix the “fragmented and broken” training system. The party has since set up the organisation in “shadow” form, appointed an interim chair from inside the DfE and advertised for board members and a chief executive.

Last month we learned the new organisation will be set up as an executive agency within the DfE rather than as an independent body, and the £130,000-a-year CEO role will be at senior civil service director grade, reporting to the director general for skills, Julia Kinniburgh, which is more junior than people expected.

Smith attempted to dispel the fears of a lack of independence.

She said: “Skills England will have an independent board which will provide leadership and direction, as well as scrutiny to ensure that it’s operating effectively and within the agreed framework. We have had hundreds of applications for that board, and very, very many applications to be the chair of Skills England as well.

“It will be close enough to government to be the authoritative and driving voice to inform policy development and to ensure that the whole of government is brought into the priorities that it identifies.

“The idea that Skills England would not be both independent from and challenging to government, I think people will realise is wrong when we announce our chair.”