T Levels will hit sustainable levels ‘by 2029’ 

T Levels need 60,000 to 70,000 students enrolled on courses each year to be viable – and officials are confident of meeting that number by 2029, top education civil servants told MPs today.

The public accounts committee was also reassured that previous internal concerns about capacity for only 48,000 T Level industry placements annually had been quashed after rules were relaxed.

Department for Education permanent secretary Susan Acland-Hood, director general for skills Julia Kinniburgh, and interim Institute for Apprenticeships and Technical Education CEO Carmel Grant were quizzed by the committee on Thursday.

The hearing followed last month’s National Audit Office report which cast doubt on the scalability of T Levels after finding student number forecasts were missed by three-quarters – resulting in a near-£700 million spending shortfall.

Here’s what we learned…

New student number target on track

Original DfE forecasts estimated 102,500 T Level students by the 2024-25 academic year, but just 25,508 learners were recruited.

After a series of “refinements”, the department now predicts 66,000 starts on the flagship qualifications by 2029.

Acland-Hood admitted that growth “hasn’t been as rapid as we first projected” but stressed the new numbers are achievable.

She told MPs: “Our latest projections look towards somewhere in the region of 60 to 70,000 T Level learners in steady state. We’re making good progress towards that number. 

“We are now tracking our most recent growth forecasts quite well. So having revised and looked at those again, learning from what we’ve seen in the early years of the programme, we’re confident that we’re now meeting the forecasts.”

Employer placement capacity no longer a concern

The NAO’s report revealed the DfE had estimated in August 2023 that the number of T Level places could be limited to around 48,000 because of “constraints imposed by shortages of teachers and industry placements”.

Quizzed on this figure by the committee, Acland-Hood said it was made “assuming we didn’t make any changes to the structures and systems” around placements, before highlighting “some quite significant changes” to the DfE’s rules announced in December.

Industry placements of at least 45 days are a mandatory component of T Levels and originally had to be fully completed in person.

Learners on nearly all T Levels are now allowed to complete 20 per cent of their placement remotely instead of at a physical workplace – with this allowance increased to 50 per cent for students on digital T Levels.

Ministers have also decided to allow placements to be carried out as “simulated activity” on the school or college’s own site, but only if this is overseen by their industry placement employer.

Owing to these changes, “our assessment now would be that we don’t think industry placements will be a constraint on getting us to the targeted [enrolments] figure,” Acland-Hood said.

She added the DfE doesn’t want to “go beyond” the hybrid working and simulated activity thresholds recently announced as “we still think it’s very important that there’s a strong face-to-face element in the work placement, because I think that’s important for the young person’s learning and engagement”.

But “early analysis” from DfE polling with employers suggest that those flexibilities “could create something close to a 55 per cent increase in the number of placements offered, because that really was proving a constraint for employers based on ways of working”, Acland-Hood claimed.

The adaptive price is right

Senior officials also defended moves to increase future T Level fees paid by colleges, blaming awarding organisations for previously charging too little. 

PAC committee member Michael Payne asked why generation 2 contract T Level prices were more expensive for colleges than currently.

Acland-Hood suggested awarding organisations (AOs) intentionally bid for lower fees in order to win the contracts, but suffered the consequences later.

“Our analysis is, we think in the first competition [AOs] underpriced rather than overpriced. And if you look at the typical fee cost of three A-levels, it’s over £300. Typically, [AOs] were setting £150 fees.

“The issue was that because they priced very low, they were essentially loss-leading. They were priced low to win the contract. Then the volumes were a bit lower, and then some of the AOs have had challenges with that.”

T Levels are awarded under licence from IfATE, with new AO contracts now being procured for ‘generation 2’ T Levels. 

Officials claimed that higher fees, plus more accurate learner number forecasts, should avoid any more AOs losing money on T Levels. 

However, if the forecasts are still out, awarding organisations will be able to increase fees again to prevent losses. This mechanism was introduced to make T Levels more commercially viable for prospective AOs. 

“One of the reasons we’ve introduced the adaptive pricing is both to protect colleges but also to make sure the [AOs] aren’t holding all of that volume risk themselves”, Acland-Hood said.

But colleges should not expect to be funded for those higher fees. 

Committee member Anna Dixon asked whether colleges would receive more funding to reflect higher fees.

Acland-Hood did not commit. “Even the new higher fees are very comparable with the fees for three A-levels or for other large vocational and technical qualifications. They’re a very small proportion of the total cost to the college as well,” she said.

Kinniburgh said fees for three A-levels were typically around £364, whereas the T Level range is now £214 to £395.

Acland-Hood concluded: “It’s not surprising that awarding bodies would like to charge more and the colleges would like to pay less.

“The adaptive pricing helps to manage that risk in both directions. So if the volumes go down, the prices can go up, but if the volumes go up, the prices go down. And there’s a cap and collar on that, so that’s not unlimited, it keeps it within a reasonable range.”