The Education Committee has laid out a blueprint for how the Government should spread prosperity and achieve its mission of economic growth by investing in the further education (FE) and skills sector. 

The cross-party Committee’s new report concludes that the sector has been starved of funding and overlooked for over a decade, despite a growing consensus about the importance of strengthening vocational and technical education and the need for services to support students’ wellbeing. The further education and skills sector is critical to the delivery of each of the Government’s missions and it needs investment to deliver. 

Below is a summary of the report’s conclusions and recommendations to the Government, including on funding, the role of Skills England, devolution, T Levels, apprenticeships, college teachers’ pay, and maths and English GCSE resits. 

Education Committee Chair Helen Hayes said:  

“Successive governments have rightly talked up the FE and skills sector as an engine for economic growth across the whole country, but it’s an engine that’s been left to run on fumes.  

“15 years of real terms funding cuts and stagnant pay have left colleges struggling to recruit and retain teachers who earn far less than their peers in schools. Far from receiving the parity of esteem it’s been promised in the past, FE continues to be treated like the Cinderella of the education system. 

“We call for investment in the sector and the establishment of a statutory pay review body to make recommendations on staff salary increases. New funding should also take into account the prevalence of special educational needs and disabilities, as well as local levels of deprivation. 

“The Government has recently taken steps to reverse the decline in apprenticeships – a key pathway to equipping young people and adults to prosper, and to delivering the skills employers need. But more work is needed at pace to get apprenticeships back on the agenda of employers around the country by simplifying funding and making them more accessible. Five years on, T Levels also need a bigger push to establish them alongside A levels and Applied General Qualifications. 

“Skills England was welcomed as a good idea on paper by leading voices in British industry, but doubts have crept in over its independence from Government. We are clear that if an independent review finds that Skills England doesn’t have the autonomy it needs to assert genuine influence, then it should be established in law to guarantee its powers.” 

Funding and improving pay 

The sector has been chronically underfunded for 15 years, and the disparity between the typical salaries of teachers in FE and secondary schools is now 15%. This has contributed to a crisis in retention and recruitment of staff and a feeling that FE is undervalued. The Institute for Fiscal Studies has said that between the 2010-11 and 2019-20 financial years, funding per student aged 16–18 fell in real terms by 14% in colleges and 28% in school sixth forms. 

The Committee recommends that FE teachers’ pay should be overseen by a new statutory pay review body, like those used to advise the Government on pay increases for primary and secondary school teachers, nurses and doctors, and which the Government is now setting up for school support staff. 

MPs recommend ending the VAT status for FE colleges, unlike schools, they cannot currently recover VAT incurred on their expenses. They also call for the Government to provide targeted funding for colleges and sixth forms and to support disadvantaged students by setting up a ‘student premium’, similar to the pupil premium used in schools. 

Guarantee Skills England’s independence 

Make UK and the Confederation of British Industry were among organisations that expressed concern about the Government’s decision to make Skills England an ‘executive agency’, rather than a non-departmental public body, as this limits its independence from its sponsoring government department. The Committee says that by June 2027, an independent review should be carried out into Skills England with a commitment to legislate further to ensure full independence if necessary.  

The Committee also recommends a review of Skills England’s governance, leadership structure and the seniority of its CEOs. 

The way in which Skills England collects data, engages with employers, and communicates with the sector must also be significantly improved. 

Further devolution 

The Committee calls for further devolution of education and training for 16-19-year-olds to Strategic Authorities, and for this provision to be included in the English Devolution and Community Empowerment Bill. 

The Government’s Youth Guarantee supports 18-21-year-olds with access to education, training and employment opportunities, and helps prevent young people from becoming NEET (not in employment, education or training). However, the Committee recommends that the Guarantee should be expanded to help 16-24-year-olds so that all young people are given the same opportunities. The Government’s 2025 Labour Force Survey found that 13.6% (or one in seven) young people in that age group are NEET. 

The funding and coordination of skills education and training for adults is overseen by regional mayors and combined authorities in some parts of the country, and by the Government in others. This patchwork of different layers of government having different degrees of responsibility for local skills training can mean that employers find it difficult to know who to engage with or to get different local authorities to work together. The Committee recommends setting up a Skills Co-ordination Board to iron out those issues and make it easier for employers to get involved. 

New ‘Modular’ T Levels 

T Levels were launched in 2020 as a technical qualification for 16-18-year-olds which is the equivalent of three A Levels. Problems have persisted with relatively few students opting for them, concerningly high numbers of students dropping out, and the Government finding it difficult to enlist employers to provide work placements that T Level students must complete. Only 71% of the 10,253 students starting T Levels in 2022 finished their course after two years. 

The Committee recommends that the Department for Education (DfE) should consider establishing smaller ‘modular’ T Levels, equivalent to one A Level. The Education Policy Institute suggested these smaller T Levels would enable students to undertake a mixture of academic and technical subjects. 

DfE should also launch a national awareness campaign for T Levels targeting students, parents, and employers. The purpose and benefits of T Levels should be set out clearly from the start of secondary school onwards. Parity of esteem between A Levels and T Levels should run through all communications, guidance and advice to schools, teachers, parents and students. 

Revive Apprenticeships 

The Committee welcomes the Government’s recent reforms to simplify the apprenticeship system and the introduction of the Growth and Skills Levy. The Committee heard that complexities in the way apprenticeships were funded had caused a decline in apprenticeship starts from 2017, and that numbers hadn’t recovered since then.  

However, for many prospective apprentices and employers, the pathway to an apprenticeship remains unclear, bureaucratic, and discouraging. The Committee recommends that to boost apprenticeship enrolment, the Government should, by April 2026, create a streamlined application and reporting process tailored for businesses, and provide dedicated support and guidance to help small businesses navigate the system. 

Foundation apprenticeships have been welcomed by the sector. However, whilst these shorter apprenticeships aim to help young people enter critical sectors, we heard concerns about the Government’s decision not to target “everyday sectors”, such as the hospitality, retail and care sectors. The Committee recommends that foundation apprenticeships be broadened to cover those sectors, which often serve as entry points into the workforce. 

Maths and English resits 

The policy of requiring pupils who fail to achieve grade 4 in maths and English at GCSE to continue to study and retake their exams is not serving its purpose. Recent figures show that over 80% of those who did not achieve grade 4 at age 16 had still not achieved that grade by 19. The Committee recommends introducing three options for those students. 

• Route A: Students who, based on their GCSE results at age 16 and prior attainment, have a realistic prospect of achieving grade 4 in maths and/or English should be supported to retake. 
• Route B: Students taking FE courses with embedded maths and English content in them, and which have been rigorously quality assured, could be considered for exemption from the requirement to resit maths and English GCSE; 
• Route C: Students who are considered unlikely to pass despite multiple resits should be offered a chance to instead take on a functional skills qualification in maths or English. 

Mental health support post-16 

Growing numbers of students are presenting with mental health problems. The previous Government launched Mental Health Support Teams (MHSTs) in 2018 at a few English colleges to provide early interventions for those with “mild to moderate needs”. Today roughly half of FE settings have an MHST, and the Association of School and College Leaders has described their rollout as “glacial”. The current Government has pledged for all schools and colleges to have an MHST by 2029-30. The Committee supports this but urges for post-16 settings to be prioritised in any further rollout alongside schools. 

Don’t scrap Applied General Qualifications 

Level 3 Applied General Qualifications (AGQs), such as BTECs, provide an essential alternative to A Levels and T Levels. Having previously been earmarked for defunding, the Government must publicly commit to the long-term retention of these qualifications and to providing sustained funding for them. Students should be able to pursue a mixture of A Levels, AGQs and T Levels in order to support more tailored and inclusive educational pathways. 

Sector Reaction

Phil Smith, Chair of Skills England, said:

“The current skills system is complex and fragmented with skills shortages holding back growth and opportunity for people and businesses.

“Skills England is playing a key role in addressing those challenges. The new foundation apprenticeships for young people in priority sectors will play a transformative role and we have already published three major reports on current and future skills needs.

“We will continue to be an active voice across government in our new home as part of the Department for Work and Pensions. Bringing together skills development and employment support under one roof makes this an exciting time for the world of skills training.”

Alice Gardner, CEO, Edge Foundation, said:

“The Education Committee’s recommendations, particularly on apprenticeships and parity of esteem, echo many of the concerns Edge has long raised. As Skills England moves to DWP, it is more important than ever that it has the independence and authority to drive a coherent, joined-up skills system that works for all.”

Anne Murdoch, Senior Adviser in College Leadership at the Association of School and College Leaders, said:

“Any hope of achieving economic growth without a strong FE and skills sector is pure fantasy. Despite this, sixth forms and colleges have been underfunded and undervalued for years, with funding per student still below the level it was in 2010. A significant number of colleges are in financial difficulty, while being staffed by teachers earning less than their school counterparts.

“The Education Committee is right to acknowledge the fact that the sector has been overlooked by successive governments, despite an acceptance of the growing importance of vocational and technical education. The Committee has correctly highlighted the disparity in pay between school and college teachers and establishing a new pay review body would be one way of fixing this.

“We are also very pleased that the Committee understands the need to retain Applied General Qualifications (AGQs), such as BTECs, alongside A-levels and T-levels. This will ensure students have a range of pathways to work and further study, with the flexibility to choose the best route for them.

“If the government is serious about growing skills and strengthening the economy, it must carefully consider the recommendations in this report and make investing in the further education sector an immediate priority.”

Dr Katerina Kolyva, CEO of ETF says:

“ETF welcomes the Education Select Committee’s powerful new report into the future of further education and skills and its clear steer that the sector is critical for the Government to achieve its five national missions.

“We are particularly pleased to see recognition of the importance of supporting teachers in the sector. What is needed now is a comprehensive workforce development strategy that tackles the structural problems highlighted by the report – such as recruitment, retention, limited professional development – systematically and in the longer term.

“As the professional body for the FE and skills sector, ETF is ready to work in partnership with others to develop and deliver such a strategy.”

Bill Watkin, Chief Executive of the Sixth Form Colleges Association, said:

“This is an important and timely report from the education committee and makes a series of welcome recommendations. We are very pleased that the committee has redoubled its support for the Protect Student Choice campaign and the retention of Applied General Qualifications (AGQs) such as BTECs. The committee is right to describe the number of young people not in education, employment or training (NEET) in England as unacceptable, but unless the government pauses the defunding of AGQs planned for next year, this problem is going to get worse rather than better. We are also pleased that the report backs our call for a fair deal on capital funding for sixth form colleges, alongside support to raise the rate of funding and drop the VAT ‘learning tax’. Sixth form colleges have managed to close the gap in pay between college teachers and their school counterparts through our current collective bargaining arrangements; the best way to ensure it remains closed, and all staff in sixth form colleges get a fair deal, is to ensure that 16 to 19 funding keeps pace with school funding.”

Dr Fiona Aldridge, Chief Executive of the Skills Federation, said:

“This report sets out, with welcome clarity, the scale of the challenge: fragmented policy, chronic underfunding, and routes that don’t always lead to occupational competence. Employers across every sector tell us the same thing—unless we fix the skills system, we cannot fix the economy.

“The Committee is right to emphasise the essential role of Skills England, deeper devolution, and long-term funding. But the real test will be how far government works with employers. Sector skills bodies – who are uniquely placed to align provision with industry needs – have a key role to play in ensuring we can deliver a system that gives every learner the chance to get in, get on, and build a great career.

“Skills underpin every one of the Government’s national missions, from clean energy to the NHS. Skills policy is economic policy. It is time to move from short-term fixes to a long-term settlement, where government investment, employer action, and sector leadership combine to build the workforce this country needs.

“Skills Federation and our members stand ready to work with government, Skills England, and devolved authorities to turn the Committee’s recommendations into lasting reform.”

Simon Ashworth, AELP Deputy CEO and Director of Policy, said:

“AELP welcomes today’s publication of the Education Select Committee’s report on further education and skills, having provided both written and oral evidence as part of the evidence-gathering process.

 “On apprenticeships, it is positive to see recommendations on reinstating funding for level 7 apprenticeships, which are part of the Industrial Strategy Growth Sectors (IS-8), and broadening out Foundation Apprenticeships to everyday economy sectors. Whilst it is good to see the Committee has recognised the “inconsistencies as a result of recent changes to maths and English requirements”, the proposed “three-route model” appears convoluted when the simple approach is to remove achievement in maths and English as an exit requirement for all-age apprentices. We already have the solution with new Foundation Apprenticeships, which should just be adopted more widely.

“Beyond apprenticeships, the report recognises the diversity of providers in the FE and skills sector (including colleges, independent training providers, employer providers, and adult education services). What we need now is to ensure that funding, inspection, and policy frameworks do not disadvantage smaller or non-traditional providers and the promotion of fair access to opportunities, resources, and recognition across all provider types.

“This aligns with concerns raised throughout the report about uneven access to funding and support, disparities in inspection and accountability mechanisms and the need for inclusive policy design that reflects the full range of delivery models.”

AoC Chief Executive David Hughes said: 

“Today’s report includes a good set of recommendations which we supported in our evidence to the committee and during their visit to City College Norwich. It’s clear that the committee members recognise the need for more investment in colleges, better pay, more trust and a system that works for all learners.

“There are, however, a couple of recommendations which might worry college leaders without further definition and discussion.

“Devolution of 16-19 funding would be a bold step and risk upsetting a system designed to fund all young people up to the age of 18 – which has lots of merits. We support the idea of locally elected mayors overseeing the 16-19 capacity to meet all leaner needs, perhaps with capital to support it, backed up by a national funding formula which followed every learner. Going further than that is not necessary.  Similarly, the idea of a pay body for FE will have many supporters but with current funding levels, there are many risks. 

“We will continue to work with ministers and officials on those recommendations that will benefit colleges and we look forward to working with the select committee to develop their proposals and recommendations further.”

An AAT spokesperson said:

“The Education Select Committee’s report on Further Education underscores the vital role of a sector that drives skills and economic growth but needs greater support to reach its potential. AAT welcomes the recommendations for more funding to empower colleges to deliver for learners and employers, simpler apprenticeship processes for SMEs, clearer post-16 pathways to guide young people into rewarding careers, and a stronger, more defined role for Skills England to tackle skills gaps. With the Post-16 Skills Strategy, Curriculum and Assessment Review, and Budget looming, now is a critical time for the Government to act. AAT is committed to working with policymakers, providers and employers to ensure Further Education becomes the powerhouse of skills, social mobility, and economic growth it should be.”

Commenting on the Education Select Committee Report today on FE funding, Jamie Cater, Senior Policy Manager, Employment & Skills at Make UK, said:

“Manufacturers will recognise many of the challenges with the skills system identified by the Education Committee in today’s report. Having seen a 41% decline in the number of engineering and manufacturing apprenticeships over the last eight years, businesses across the sector find themselves unable to access the training they need.

“Make UK’s Industrial Strategy Skills Commission noted the difficulties experienced by training providers, including FE colleges, in sustaining valuable engineering courses – no increases in funding for delivery of key apprenticeships, lack of support for capital investment in up-to-date, industry standard equipment, and struggles to recruit and retain teaching staff. The Education Committee’s report reflects all of these concerns, and the Government must ensure that providers are supported to continue offering the training needed for industrial strategy sectors like advanced manufacturing.

“This should start at the Autumn Budget with the Government ringfencing all money raised from the Apprenticeship Levy and Immigration Skills Charge for investment in the skills system. From there, the training sector can be equipped with the resources it needs for businesses to access the training they need and build their workforce for the future.”