DfE Relaxed Functional Skills Rules for Apprentices

Introduction: The Impending Rule Change

Recent news (as reported by FE Week) suggests that Functional Skills English and maths rules for adult apprentices are set to be relaxed. Under the proposed changes, apprentices aged 19 and over would no longer be required to achieve Functional Skills qualifications to complete their apprenticeship if they do not already hold a GCSE pass. Instead, Functional Skills would become an optional exam for those who wish to gain these qualifications.

For 16 to 18-year-olds, exit requirements are expected to remain the same—namely, they still need to work towards Functional Skills if they do not have a GCSE pass.

This shift is significant for apprenticeship training providers because it reduces the total number of learners who need Functional Skills exams. And with fewer learners requiring Functional Skills, it could become far less cost-effective for providers to manage English and maths testing in-house.

Relaxed Functional Skills Rules for Apprentices helpline: 020 4574 9155

What Does This Mean for Providers?

1. Lower Volume of Learners
   With fewer adult apprentices mandated to do Functional Skills, providers could see a substantial drop in the number of learners who must sit these exams.
2. Reduced Complexity
   While Functional Skills exams will remain essential for 16 to 18-year-olds (and still remain optional for those 19+), overall exam volumes will likely decrease. This drop in demand may not justify the fixed overheads traditionally associated with running large-scale in-house exam operations.
3. Focus on Retention
   Functional Skills requirements have long been cited as a leading cause of apprentice dropouts. The relaxed requirement for adults may remove a major barrier, potentially improving overall apprenticeship completion rates.

Running Functional Skills Exams In-House: A Costly Approach With Lower Numbers

When a provider manages Functional Skills exams internally, there are typically three main cost areas:

1. Annual Fee to Exam Board
   Providers pay a subscription or license fee (often around £3,000 per year) to the exam board for administering exams in-house.
2. Dedicated Admin Staff
   Someone needs to oversee exam registration, scheduling, and compliance. Let’s estimate £30,000 per year for a full-time admin position.
3. Per-Exam Fees
   Depending on the exam board and subject, each exam attempt costs around ~ £30 per learner per qualification. For high volumes, these costs can be justified—but with fewer learners, these become disproportionately large. 

*These figures are estimates, including SLC costs, invigilation costs, IQA costs and other miscellaneous costs for running functional skills exams. 

The Worked Example: Old vs. New

Let’s imagine how a training provider’s costs shift when the number of learners sitting exams goes from 300 (old system) down to 30 (after these new rules reduce demand).

Scenario 1 (Old System, 300 Learners)

• Annual fee to exam board: £3,000
• Admin staff: £30,000 per year
• Exam fees: £30 per exam × 300 learners = £9,000

Total annual cost:
= £3,000 + £30,000 + £9,000
= £42,000

With 300 learners, running in-house made reasonable sense—despite the high overheads—because the per-learner cost remained manageable when spread across a large group.

Scenario 2 (New System, 30 Learners)

With fewer apprentices mandated to do Functional Skills, you only have 30 learners opting for these exams. At this point, you have two choices:

1. Keep the Old Subscription Model
   • Annual fee: £3,000
   • Admin staff: £30,000
   • Exam fees: £30 per exam × 30 learners = £900

Total: £3,000 + £30,000 + £900 = £33,900

1. Pay-Per-Exam Service (No Annual Fee or Dedicated Admin Staff)
   • Cost per exam: ~£129 per learner
   • Number of learners: 30

Total: 30 × £129 = £3,870

Clearly, £3,870 vs. £33,900 is a striking difference. The new “pay-as-you-go” approach can save tens of thousands of pounds making it the most cost-effective option for providers who now see drastically fewer learners requiring exams.

*PFS pricing can vary depending on learner numbers, representative of a 30 learner sample

How PFS Can Help

This is exactly where PFS comes in. We handle Functional Skills testing for providers without the need for:

• Annual Exam Board Subscription Fees
• In-House Admin Staff
• Managing the Entire Testing Infrastructure

Our pay-per-exam service model means you only pay when a learner actually needs to sit an exam. This approach protects providers from spiraling costs when learner volume is unpredictable—or in this case, drastically reduced by the new regulatory changes.

We already work with lots of training providers to help them achieve their functional skills goals:

Key Takeaways

1. Rule Changes Mean Fewer Exams
   Adult apprentices (19+) may no longer require Functional Skills qualifications as a mandatory exit requirement.
2. Running Exams In-House Becomes Less Viable
   With fewer learners, fixed overheads (exam board fees, admin salaries) become far less cost-effective.
3. Pay-Per-Exam Approach Saves Money
   Instead of paying ~£33,900 to run 30 exams in-house, providers can spend ~£3,870 using a specialized pay-per-exam partner like PFS.
4. Ease of Use and Compliance
   PFS ensures providers stay up-to-date with exam regulations and handles all administrative requirements—taking the burden off your staff.

Conclusion

The expected relaxation of Functional Skills requirements for adult apprentices is big news for apprenticeship providers. While it promises to remove a completion barrier for many learners, it also shifts the financial equation around delivering Functional Skills in-house. With the volume of exams potentially falling dramatically, continuing with high fixed costs makes little sense.

A pay-per-exam solution like PFS offers the flexibility, compliance, and significant cost savings providers now need. As the sector awaits full details of the policy changes, now is the perfect time to review your Functional Skills delivery model and consider switching to a more cost-effective approach.

Interested in exploring a pay-per-exam solution for your learners?
Contact Pass Functional Skills today on 020 4574 9155 to explore a cost-effective, fully managed Functional Skills exam solution, or submit the contact form below and one of our provider specialists will be in touch.

Relaxed Functional Skills Rules for Apprentices helpline: 020 4574 9155

Written by

Pass Functional Skills Team

We help thousands of students each year with revision, courses and online exams.