Uncertainty over whether the government will go ahead with proposed changes to English apprenticeship funding is ¡°another headache¡± for university leaders at an already difficult time, according to sector representatives.

Months of waiting for clarity over plans to defund level 7 apprenticeships ¨C equivalent to a master¡¯s degree ¨C have produced scant answers, creating further anxiety for the universities that have moved heavily into this area of provision.

Prime minister Keir Starmer first announced the move last autumn as part of efforts to reallocate funding from the planned new ¡°growth and skills levy¡± to support more investment in opportunities for entry-level workers, following concerns that too much of the funding is being spent on the education of already skilled employees.

Businesses will be encouraged to fund level 7 programmes themselves, Starmer said at the time, without going into further detail. Ministers have repeatedly said further announcements would follow ¡°as soon as possible¡±.

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¡°Lingering doubt as to the future funding of these courses is another headache to university leaders who, now more than ever, need certainty, particularly around finances,¡± said Rachel Hewitt, chief executive of the mission group MillionPlus, which represents modern universities.

Times Higher Education understands a final decision is still yet to be made by the government on whether the proposed changes will go ahead, in part because of concerns about the impact of the plans on training and staffing for the country¡¯s healthcare sector.

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Sources suggested that opposition from the Department of Health and Social Care could be behind the delayed decision-making.

Employers and universities have repeatedly stressed that funding for training in high-skilled occupations is needed to drive the government¡¯s employment and productivity growth agendas.

Vanessa Wilson, chief executive of University Alliance, said there had been ¡°vocal opposition to defunding level 7 apprenticeships¡± , pointing out that the organisation¡¯s open letter to the chancellor on the issue received more than 600 signatures from employers, professionals and apprentices themselves, as well as 60 NHS Trusts.

¡°Advanced-level apprenticeships are absolutely essential for filling skills gaps, such as for higher-level clinical staff in the NHS or chartered town planners in local authorities,¡± she continued. ¡°Public sector employers like NHS trusts do not have access to additional budget to fund these qualifications outside the apprenticeship levy.¡±

Data recently shared by the Department for Education shows that money from the levy ¨C a tax on the payroll of larger employers ¨C can account for a significant chunk of universities¡¯ income, with the Open University receiving more than ?18 million in funding in the 2022-23 academic year ¨C the most paid out to a single public higher education provider.

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This was followed by Staffordshire University, which received ?17.4 million, and Sheffield Hallam University, which received ?13.7 million.

Although universities do not necessarily make a huge amount of profit from these programmes, which can be expensive to run, it comes as the sector already faces a cash crisis, with almost a third of universities that posted their annual accounts in January experiencing a deficit.

At Sheffield Hallam University, part time home undergraduate student fees increased by ?1.8 million in 2023-24, which its accounts attributed in part to ¡°higher numbers of students on apprenticeship courses¡±.

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Similarly, the University of Exeter has said that a growth in degree apprenticeship provision, coupled with a bounce back in home entrants, led to a growth in home tuition fee income of 4.5 per cent in the last financial year.

In its latest financial statements, Anglia Ruskin University identified ¡°investment in degree apprenticeships¡± as a way to mitigate against the risks of falling short on student recruitment targets and failing to plug the projected gap between income and expenditure in 2024-2026.

However there are fears that the government could go further still, and look at defunding other higher-level apprenticeships. Neil O¡¯Brien, the Conservative shadow skills minister, believes that if the changes do go ahead, funding is likely to be shifted to level 6 degree apprenticeships instead, bringing these into scope for further cuts.

Hewitt added: ¡°Defunding level 7 apprenticeships in an effort to refocus provision on younger learners makes financing this type of course a zero-sum game when a different approach is required and, should the government press on, runs counter to its rhetoric on skills and social mobility.

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¡°The government is right to wish to grow the number of apprenticeships, but this should be achieved through increasing the overall budget, not by defunding courses providing high level skills and training to key sectors, such as teaching and healthcare.¡±

helen.packer@timeshighereducation.com