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.
Employers that take on a T Level Placement (and when it works well) become real ambassadors for the placement model. It is a superb talent tool and hugely impactful. But every year, the challenge to find placements begins and it is getting harder and harder. The market is also becoming saturated with more education providers fighting over minimal places. There is no dispute on the skills learned – T Level placements are visibly benefitting learners and businesses but with employers unable to offer placements (or unwilling due to increased pressures), the model needs a rethink.
The £25,000 payment towards the cost of hosting T-Level learners is simply not cost-effective for many employers, particularly in trade industries where health and safety (H&S) compliance, supervision, and mentoring are critical. This amount would barely cover the cost of hiring a staff member to oversee the placements, let alone cover the additional administrative burden, insurance, PPE, and risk assessments required for young learners in high-risk environments.
For small to medium-sized businesses, which make up a significant portion of the trade industry, taking on a T-Level student can represent a net financial loss. Unlike apprenticeships, where learners contribute to productivity over time, T-Level placements require extensive guidance, often reducing the efficiency of experienced workers who need to step away from their own tasks to train and supervise.
If the government is serious about increasing employer participation, funding should reflect the actual costs, including the hiring of dedicated placement coordinators, H&S compliance officers, and industry mentors. Otherwise, these placements will remain financially unviable for many businesses.
Our SME business did T level industry placements for the 3 years, to say the following please;
ESF was the best employer support scheme they ever had, they never gave it a chance, 1 year is not possible to get it properly working, the previous scheme of £1,000 per student didn’t work that well, one size fits all doesn’t really work.
If they spent only 4m and the budget was 12m , why not keep it going for another 2 years and give it a chance to work?
It is true they seem to have retired all support for this year and next which is terrible news for SMEs, T level placements are not viable without support, many stopped doing placements because of this when they need more businesses not less.
The DofE reasoning for stopping the support is nonsensical, big business doesn’t need the support never did, it is vital for small businesses to participate, they don’t seem able to tell the difference between big and small businesses.
They need to allow individual colleges to spend more on support as there is always an underspend , focus the scheme on SMEs as well as big business, focus on areas with real shortages of placements, digital, engineering etc.
SMEs employ over 60% of people in the private sector and do most of the training.
If they give the employer support a proper roll out and a chance it would work and make a big difference.
Although very regretfully as this article says it looks like all the support is stopped for good and T levels are going to struggle more and more which is a real shame.
The article fails to mention that it took the DfE until around November of that period for their claims portal to work! This caused problems for providers in being able to administer the funding effectively. It needed a further year to gain traction but sadly the funding was taken off the table which is a real shame as placements continue to be a huge challenge and cost for employers and providers such as vaccines for healthcare students (providers now footing the bill), IT Equipment for digital placements, SME’s simply cannot afford this.
The Department of Education have done such as bad job with T level industry placements it makes them look like the Department of Transport with HS2! There is a surge of student numbers in FE now, where do they go for the experience and work part of the T level? what placements do they have? Zero short, medium or long term planning in this, Department of Education seems to think freeloading of business will do the trick, what a joke! The industry placement changes they made recently were so desperate, anything to avoid spending any money whatsoever.
They could change it, they did in March a couple of years ago when they introduced the Employer Support Fund, but zero chance of that, there was £150 million for T level capital fund this year, only 10% of that would solve the industry placement problem but they won’t spend it.
So sad for all the people who worked so hard on this.