Phillipson to exempt young people from level 7 apprenticeships funding axe

Education secretary makes ‘important concession’ amid backlash from other government departments

Education secretary makes ‘important concession’ amid backlash from other government departments

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Ministers are set to row back on plans to remove public funding from all level 7 apprenticeships and include an exemption for young people aged 16 to 21, FE Week understands.

Education secretary Bridget Phillipson has written to Pat McFadden, Cabinet Office minister for intergovernmental relations, to make the “important concession” which will be applied to all apprenticeship standards at master’s level.

Her letter, seen by FE Week, said that she sought clearance from the Cabinet Office on March 3 “on the decision to remove public funding from all level 7 apprenticeships, with no exemptions”.

FE Week understands that multiple government departments rebelled against the plan and have forced Phillipson into a rethink.

Phillipson’s latest letter, dated April 23, said: “I have now agreed with other departments to proceed with an exemption for young people (who start when they are aged 16-21) across all level 7 apprenticeships. 

“An exemption for young people aligns with our opportunity mission and our intention to rebalance the apprenticeship programme to support more young people at the start of their career, as announced by the prime minister in September 2024.

“While not giving employers everything they seek, it demonstrates that government has listened to business and enables these apprenticeships to continue across all sectors where they are able to provide a route in for young people.”

‘Important concession’

Phillipson added that she hopes this “important concession enables colleagues to withdraw all conditions and support me in taking the challenging steps needed as we develop the growth and skills levy”. 

The “conditions” that the education secretary referred to are not known. 

A timeframe for when the public funding ban on level 7 apprenticeships for those aged 22 and above will begin, or when the Department for Education will officially announce the plans, is also not yet known.

Ministers have been working on controversial plans to remove level 7 apprenticeships from the scope of apprenticeship levy funding since September because the budget that the Department for Education receives from Treasury is close to going overspent, largely due to the rise in higher-level apprenticeships which are the most expensive to deliver.

The cash freed up from defunding level 7s will aid Labour’s plan to expand the apprenticeship levy into a growth and skills levy that funds a wider range of training programmes, and “rebalance” funding back to young people. Figures from 2023-24 show £238 million of the £2.5 billion apprenticeships budget was spent on level 7 programmes.

Level 7 apprenticeship starts are dominated by the accountancy or taxation professional and senior leader standards, which attract £21,000 and £14,000 respectively per apprentice. 

But other popular programmes include advanced clinical practitioner, solicitor, academic professional, chartered town planner, district nurse and community nurse specialist practitioner.

Phillipson’s letter stated that her officials will “share the communications and handling plan for the announcement of this decision with your officials, and they are happy to work with you on preparing for the announcement and on stakeholder management”.

The DfE was approached for comment.

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