Regulating post-16 VTQs at L2 and L3

Ofqual has a duty under the Apprenticeship, Skills, Children and Learning Act 2009 to avoid introducing or maintaining unnecessary regulatory burden.

Introduction

This regulatory impact assessment sets out the potential impacts to stakeholders that may result from implementing the proposals set out in the consultation. To identify these impacts, we have assumed a hypothetical baseline where access to the markets is restricted in accordance with our proposals in the recognition consultation, but we do not introduce any further rules or requirements. To be clear, we are not consulting on the baseline, nor are we presuming the outcome of the recognition consultation.

We have taken a risk-based approach in developing the proposals in this consultation. More prescriptive requirements are applied only where necessary to meet our statutory objectives, including maintaining public confidence in regulated qualifications and ensuring high standards.

The majority of the proposals are focused on technical aspects of qualification design and delivery. From an impact perspective these proposals act in a similar manner, leading to similar types of costs and benefits across a consistent set of stakeholders. Therefore, to more clearly communicate and differentiate the overall effect of the proposals, we have grouped them into three categories:

• Proposals focusing on the design of the new qualifications
  • These include proposals around the purpose of the qualifications; assessment objectives; grading and standard setting; assessment structure and availability; the degree of timetabled and centre-marked assessment
• Proposals focusing on the delivery of the new qualifications
  • This includes the proposals affecting Moderation and CASS controls for centre-marked assessments, as well as the mechanism for students and centres to request reviews and appeals of marks and grades
• Proposals focusing on additional regulatory oversight for the new qualifications
  • This is specifically focused on the proposal to require new qualifications to go through our accreditation process

Impact of proposals on users of the new qualification types (students, centres, employers and HEIs) 

The economic value of qualifications depends on their ability to accurately represent students’ capabilities. This supports effective matching into further education and the labour market and therefore contributes to appropriate wage setting, productivity and growth.

The proposals set out in this consultation aim to protect this value by ensuring that students, employers, HEIs and other stakeholders can rely on the information the qualifications convey. The proposals focusing on the design and delivery of the new qualifications work to this goal by ensuring that the technical aspects of the qualifications are suitable for their intended content and purpose, and that there is appropriate oversight of marking to support reliable and consistent grading. Given the importance that the new qualifications are intended to have in the labour market, we are also proposing an additional layer of oversight, accreditation, which we use for qualifications such as GCSEs and A Levels.

The proposals focusing on the delivery and additional regulatory oversight of the new qualifications will also increase costs for centres relative to the notional baseline where the more basic form of Centre Assessment Standards Scrutiny is adopted. A more comprehensive Moderation process may require both one-off and ongoing costs for centres as they first establish and then maintain appropriate systems and procedures. Centres which do not already engage in Moderation that meets Ofqual’s requirements may face higher set up costs due to lack of familiarity with similar requirements – for example, having to conduct additional training across their staff body to support effective delivery.

We are consulting on the potential for including a system for students to review and appeal their marks. We will consult separately if necessary on any specific rules we propose to put in place, which will include a more detailed consideration of associated impacts, but it is appropriate to note at this stage that any system would necessarily lead to additional costs for centres and awarding organisations.

The price of the new qualifications may be different to the price of qualifications that are currently in the market and taken by 16 to 18-year-olds. This is due to a wide variety of factors, including the additional requirements that awarding organisations must follow as proposed in this consultation to secure that these qualifications command confidence, standards are maintained and are consistent between awarding organisations. On the other hand, awarding organisations will be required to make use of nationally set content to aid the development of their qualifications, which will have some efficiency benefits. We expect that most of the market will involve a degree of competition, which should have some positive effect on pricing.

These factors taken in aggregate mean that centres may experience initial uncertainty in budgeting for qualification fees as the market is established and awarding organisations publish their prices. It is possible that centres may experience fees that are different and potentially higher relative to the baseline scenario.

We will continue our price transparency work, including publishing a yearly analysis of qualification fees in the Qualification Price Statistics report, in order to support centres and other qualification purchasers in making informed decisions about the value for money of their offer.

Impact of proposals on awarding organisations

DfE’s reforms are intended to simplify the post-16 landscape, making it more navigable for students, educational institutions and employers. The proposals in this consultation support the establishment of the new vocational qualifications by reducing the risk of issues in their design and delivery, supporting stakeholders to put their confidence in those aspects of the qualifications from the start. This would increase their value to users and encourage wider adoption and sustained use. Awarding organisations delivering these qualifications would benefit from this shared investment in building a strong reputation and from reduced risk that poor design or delivery could damage that reputation.

We are aware that our proposals will need to be implemented during a period of multi-faceted reform, including changes to other qualification sectors such as apprenticeship assessment. While the direction and sequencing of reform is set by government more broadly, we understand that resources for qualification development may already be stretched, which could add to awarding organisations’ overall costs.

The proposals relating to technical aspects of the design of new qualifications, such as the grading system and balance of assessment methods, introduce an additional developmental cost to awarding organisations. In the absence of our proposed rules, awarding organisations would have had to make their own decisions on these aspects of qualifications and assessment. The additional cost that awarding organisations face as a result of our rules depends on how different their decisions would otherwise have been.

Additionally, the proposals relating to grading and setting standards for V Levels may introduce additional on-going costs for any awarding organisations who would have taken a different approach in the absence of the proposals. The proposals concerning assessment availability may also increase annual costs to a degree depending on whether it prevents an awarding organisation from leveraging economies of scale by aligning the assessment window with its other qualifications.

The proposals concerning assessment availability and terminal assessment may lead to additional administrative and monitoring costs to awarding organisations. This is particularly the case with V Levels, where students have the option of assessment in either year 1 or 2 of their course, and awarding organisations will need to monitor individual student choices.

The proposals relating to the delivery of the new qualifications, particularly the introduction of Moderation, could create substantial ongoing costs for awarding organisations. The main cost arises from the increased resource required for a more comprehensive approach compared with the minimum CASS requirements assumed in our baseline for non-Moderated assessments. Awarding organisations will also need to invest in appropriate resources to carry out the necessary work at scale, especially if the eventual demand for the new qualifications is intended to be very large.

Many awarding organisations may be accustomed to the requirement to establish and maintain an assessment strategy following their use in other qualifications. The specific requirement may be less well known to others, though the principle of documenting and reviewing a qualification lifecycle is likely to be familiar to many awarding organisations. There may be assessment strategy familiarisation requirements in some instances, and for all awarding organisations there will be cost involved in meeting this requirement, keeping the document under ongoing review, and updating the strategy should Ofqual require.

Awarding organisations will also need to invest in appropriate support and training for centres to ensure they are able to efficiently engage with the awarding organisation’s processes, to support effective and secure assessment.

We are proposing that the new qualifications should be accredited to ensure only those of an appropriate quality can be delivered. This could create minor to moderate additional costs for awarding organisations, particularly if qualifications do not meet the accreditation criterion and need to be resubmitted. We are committed to running an efficient decision-making process to keep any additional cost to a necessary minimum. These costs are one-off for each qualification, rather than recurring. Awarding organisations with prior experience of accreditation may incur lower additional costs, whereas those unfamiliar with the process are likely to spend more time becoming accustomed to the requirements and therefore face higher costs.

Summary of anticipated impacts

This overview is intended to support respondents in identifying any additional impacts, costs, or benefits that may not have been captured in the preceding analysis.

We have provided a broad sense of scale for the change in cost or benefit that each impact stemming from the proposals introduces. We have categorised costs and benefits as either experiencing a reduction, none/negligible increase, minor to moderate increase, or major increase relative to the baseline of no additional rules or requirements above the General Conditions for these qualifications. 

We are asking stakeholders to engage with us to more fully understand the scale of the impacts related to the proposals in this consultation, and therefore the information in the table below is subject to change. 

Impact on awarding organisations

Impacts from proposals focusing on the design of the new qualifications

• There will be additional development costs for awarding organisations depending on how different their design decisions would have been in the absence of our proposals.
  • Minor to moderate increase in costs
• There will be additional delivery costs for awarding organisations relating to the proposals setting out the maintenance of standards, including building a range of evidence to support grade boundaries.
  • Minor to moderate increase in costs

Impacts from proposals focusing on the delivery of the new qualifications

• Our proposals on assessment availability may limit the ability of awarding organisations to capitalise on economies of scale in qualification delivery. This is most likely for V Levels, which will have a single assessment window each year.
  • Minor to moderate increase in costs

Impacts from proposals focusing on the delivery of the new qualifications

• Our proposals on assessment availability and terminal assessment may lead to additional administrative and monitoring costs as awarding organisations need to maintain a record of when each student chooses to take their assessments through their course.
• Our proposals restricting OSA for V Level Assessment by Examination to digital systems and data V Levels in the initial tranche may lead to higher overall and unit costs for awarding organisations where on-screen assessment is cheaper than paper-based assessment.
• • Minor to moderate increase in costs
• There will be additional costs in reviewing and addressing reviews and appeals to marks and grades awarded.
  • Increase in costs – the extent depends on the final policy

Impacts from proposals focusing on additional regulatory oversight of the new qualifications

• Awarding organisations will benefit from stronger brand value and increased demand as users view the new qualifications as more trustworthy and reliable.
  • Major benefit
• There will be additional administrative costs for awarding organisations as a result of engaging with the accreditation process for new qualifications.
  • Minor to moderate increase in costs
• There will be additional costs resulting from the requirement to produce and maintain an assessment strategy applicable to their new qualifications.
  • Minor increase in costs

Impact on students

• Increased confidence in qualification quality improves students’ ability to use the qualification for progression into work or further training, supporting labour market efficiency and economic growth. 
  • Major increase in benefit (for students, employers and educational institutions)

Impact on centres and other stakeholders

Impacts from proposals focusing on the delivery of the new qualifications

• Centres will face additional costs familiarising themselves and complying with moderation requirements – including the initial investment in developing appropriate processes.

  • Minor to moderate increase in costs
• There will be additional costs in reviewing and addressing reviews and appeals to marks and grades awarded.
  • Increase in costs – the extent depends on the final policy
• Centres will face lower risk of poor-quality delivery for V Level Assessment by Examination and associated costs as a result of our OSA proposals.
  • Minor to moderate increase in costs

Impact from proposals focusing on additional regulatory oversight of the new qualifications

• Awarding organisations may pass on a portion of the costs associated with the additional rules and requirements they must comply with. This means the fees for the new qualifications may be different to the qualifications they are replacing or would have been introduced in the absence of the additional scrutiny.

  • Minor to moderate increase in costs

Impact of on-screen assessment proposals

In our recent consultation on regulating on‑screen assessment for GCSEs, AS and A Levels, we set out our view of the impacts on awarding organisations, centres and students. We have applied the same guiding principles in developing our proposals for the use of on-screen assessment in the new qualifications.

Our approach to regulating on-screen assessment for the new qualifications is intended to manage risks to standards, fairness and public confidence and ensure secure and reliable delivery. At the same time, our proposals also allow awarding organisations to use on-screen assessment where appropriate and risks can be effectively mitigated.  

While we recognise that the evidence on the benefits of on-screen assessment is limited, we believe our approach will have positive impacts for students, centres and awarding organisations. The benefit to students and centres comes from the reduced risk of costly financial and reputational issues should they choose to use on-screen assessment. Awarding organisations are likely to benefit from a reduced risk to the reputation and perceived value of those qualifications arising from delivery issues.

There may be additional costs to stakeholders as a result of tranche 1 subject‑based restrictions on on‑screen assessment in V Levels. Awarding organisations may experience higher delivery costs where paper‑based assessment is more costly than on‑screen assessment, and higher unit costs where fixed technological costs cannot be spread across a greater number of assessments. This could lead to higher fees compared to a baseline where no additional restrictions on on‑screen assessment are imposed, or where opportunities to deliver assessments via on‑screen assessment in permitted subjects are not taken up.

Unlike the GCSE, AS and A Level proposals, we are not proposing that awarding organisations maintain different specifications for paper-based and on-screen assessment. We are also not proposing any additional restrictions on the use of on-screen assessment for centre-marked assessments in V Levels or for Foundation and Occupational Certificates. These proposals are intended to limit the introduction of unnecessary costs on students, centres and awarding organisations.

Innovation

Ofqual has a duty under the Apprenticeships, Skills, Children and Learning Act 2009 to have regard to the desirability of facilitating innovation relating to the provision of regulated qualifications. Ofqual has committed to surveying awarding organisations’ views of the impact of its regulatory requirements on innovation and to consider any revisions required in response.

The proposals we are making are intended to support the design and delivery of V Levels, Foundation Certificates and Occupational Certificates in line with DfE policy and Ofqual’s statutory objectives.

The proposals to introduce Conditions, requirements and guidance for these qualifications, which would otherwise be regulated against the General Conditions, may limit the scope for innovation to some extent. Specifying the proportions of different types of assessment, and restricting availability of those assessments, could be seen to restrict more innovative approaches being developed.

We have however only proposed requirements where we consider these necessary to secure Ofqual’s objectives, and to meet DfE’s policy intent for these qualifications. Where we have proposed additional Conditions, requirements and guidance, we have been no more prescriptive than is necessary, meaning awarding organisations will have some flexibility in their approaches and within which they can innovate.

Given the intention to ensure comparability between awarding organisations offering qualifications designed against the same subject content, we consider the approaches we have proposed to be necessary. They will allow scope for innovative approaches, but within defined parameters.