Open consultation

Regulatory impact assessment

Published 5 November 2026

Applies to England

This regulatory impact assessment (RIA) sets out the potential impacts on stakeholders that may arise from implementing the proposals set out in this consultation.

The impacts have been assessed against a position in which no additional recognition requirements apply beyond those that would ordinarily apply to these qualifications. Under that position, awarding organisations would be able to seek recognition using the original Criteria for Recognition and the relevant regulatory framework for each qualification type. The impacts described in this assessment reflect the additional effects of the proposals relative to that position.

In developing these proposals Ofqual has a duty under the Apprenticeship, Skills, Children and Learning Act 2009 to avoid introducing or maintaining unnecessary regulatory burden. The proposals have also been assessed against the Growth Duty (section 108 of the Deregulation Act 2015), requiring Ofqual to have regard to the desirability of promoting economic growth.

The analysis is based on qualifications currently in the market that are most likely to be affected by the introduction of V Levels, Foundation Certificates and Occupational Certificates. These qualifications are identified by applying the Department for Education’s defunding criteria to the current regulated qualifications landscape. For each impact, we have assessed the timing of the impact (either one-off or ongoing) and the magnitude or scale.  

V Levels

Impact on awarding organisations

Retaining the reform criteria for V Levels is intended to provide greater assurance to users of the qualifications that awarding organisations entering the market have the capability, capacity and governance necessary to develop and deliver qualifications at the required scale. This should reduce the likelihood of awarding organisations investing resources in development activity only to be unable to demonstrate the necessary capability, capacity and governance to deliver V Levels successfully.

The proposal to retain the reform criteria for V Levels will, however, restrict market entry relative to reverting to the criteria used for other qualifications. Awarding organisations that do not meet the additional requirements may be unable to enter the V Level market. The impact is likely to be greatest for awarding organisations with significant existing provision identified as predecessors in subject areas that align closely with future V Levels and where delivery to 16- to 18-year-olds forms an important part of their business.

Where students transition from existing qualifications to V Levels, awarding organisations that are not recognised to offer V Levels may experience a reduction in student numbers and associated revenue. The scale of this impact will depend on future funding and uptake decisions and cannot be quantified at this stage.

Consultation responses to the tranche 1 recognition proposals also highlighted concerns that awarding organisations recognised in earlier tranches may benefit from an element of first-mover advantage, potentially making entry more challenging for some later applicants. Any such impacts are expected to be moderated by centres’ procurement decisions, the ability of new entrants to compete on quality and service, and the continued opportunity for awarding organisations to apply for recognition in later tranches.

Awarding organisations seeking recognition to deliver V Levels will also face additional compliance and evidential costs. These costs will vary according to the extent to which an organisation can draw upon existing experience and evidence of delivering qualifications at a similar scale and level of complexity. However, the requirements apply only to organisations that are already recognised by Ofqual, and the evidence requirements have been designed to build as far as possible on information and evidence already available. Awarding organisations with relevant experience are likely to face lower costs than those seeking to demonstrate capability for the first time.

• timing: impacts are expected to be primarily one-off, reflecting recognition applications and market entry decisions, with some ongoing impacts where awarding organisations are unable to participate in future V Level delivery
• magnitude: minor to moderate for awarding organisations going through the recognition process alongside potential for differential awarding organisation impacts based on their current qualification offer

Impact on students, centres, employers and higher education providers

The principal benefit of these proposals is increased confidence that V Levels are developed and delivered by awarding organisations with the capacity, capability and governance arrangements necessary to support a high-volume, high-stakes qualification. This should secure confidence in the reliability, validity and comparability of results, supporting the use of V Levels for progression into higher study, higher technical training or apprenticeships. Confidence in qualification quality is an important contributor to the value qualifications provide to students, employers and the wider economy.

The proposals may also reduce the risk of disruption arising from delivery failures, assessment issues or poor operational performance. Centres invest resources in staff training, curriculum planning and assessment administration. Reducing the likelihood of delivery problems may therefore help protect these investments and limit disruption for students.

The proposals are likely to reduce the number of awarding organisations able to offer V Levels relative to the position without the additional recognition requirements. This may reduce choice for centres and students and increase the likelihood that centres need to work with awarding organisations that they have not worked with before. Where this occurs, centres may incur one-off transition costs associated with familiarising themselves with new systems, processes and qualification requirements.

Respondents to the tranche 1 recognition consultation also highlighted a potential risk that a more concentrated market could reduce the availability of specialist or niche provision where smaller awarding organisations are unable to enter the market. This could reduce the diversity of approaches available to centres and students in some subject areas.

A less concentrated market may also reduce competition between awarding organisations. This could lead to higher qualification fees than would otherwise have arisen or reduce incentives for awarding organisations to compete through service quality and innovation. Ofqual’s Qualification price statistics reports show variation in fees across vocational qualification markets, and it is unclear the extent to which V Level pricing will align. This is because of their distinctive characteristics, including nationally specified content, occupational focus and fixed assessment requirements. The scale of any such effect is uncertain and will depend on the number of organisations ultimately recognised and the fees they choose to charge.

• timing: benefits are expected to arise on an ongoing basis through increased confidence in qualification delivery and reduced risk of disruption
• magnitude: low to moderate overall, although some effects on choice and competition remain uncertain

Foundation Certificates and Occupational Certificates

Impact on awarding organisations

Reverting to the original Criteria for Recognition for Foundation Certificates and Occupational Certificates will allow a wider range of awarding organisations to seek recognition than was the case for the first tranche of qualifications. This may support greater competition, including from smaller and specialist providers.

By broadening the pool of organisations able to meet the criteria for recognition to offer these qualifications, the proposals may encourage competition through service quality, qualification design and support for centres.

Awarding organisations may incur minor one-off costs in familiarising themselves with the recognition criteria and process for applying.

Although the proposals reduce potential hurdles associated with market entry, awarding organisations will still need to meet the requirements of the original Criteria for Recognition and Qualification Level Conditions (QLCs). Some organisations may therefore remain unable to enter these markets, particularly where they cannot demonstrate that they will have the capacity, capability or governance arrangements necessary to develop and deliver qualifications at the required scale.

• timing: impacts are expected to be primarily one-off, reflecting familiarisation with the recognition arrangements, with ongoing benefits associated with reduced barriers to entry and increased competitive opportunities
• magnitude: low to moderate overall

Impact on students, centres and employers

The proposals may increase the number of awarding organisations recognised to offer Foundation Certificates and Occupational Certificates, providing centres with a wider choice of qualifications and providers than would be available under the tranche 1 approach. This may be particularly beneficial in occupationally specific or specialist subject areas, where a specialist awarding organisation may be able to enter the market.

A less restrictive criteria for entry may also reduce the likelihood that centres need to move away from existing awarding organisations. Where centres can continue to work with a familiar provider, they may avoid some of the switching and implementation costs.

Increased competition between awarding organisations may place downward pressure on qualification fees and encourage providers to compete through service quality, responsiveness and innovation.  Ofqual’s Qualification Price Statistics (QPS) publication shows variation in fees across vocational qualification markets, reflecting differences in qualification characteristics and delivery models. The scale of these effects is uncertain and will depend on the number of organisations that ultimately enter the market and the choices made by centres and students. However, compared with the tranche 1 approach, the proposals are expected to support a greater degree of competition.

• timing: benefits are expected to arise on an ongoing basis through increased choice, competition and continuity of provision
• magnitude: low to moderate overall

Growth Duty

The proposals support economic growth by helping to ensure that qualifications remain a trusted and meaningful signal of skills, knowledge and competence. Evidence suggests that qualifications contribute to productivity, employment and labour market matching, while the Department for Education’s analysis indicates that improvements in labour composition, including qualification levels, have made a positive contribution to productivity growth. Maintaining confidence in qualifications is therefore important in order to ensure that they continue to support students, employers and the wider economy. Retaining the reform criteria for V Levels is intended to protect confidence during the introduction of a high-volume qualification series, while the proposed approach for Foundation Certificates and Occupational Certificates seeks to support market participation and competition and maintain appropriate regulatory oversight.

Question 3

Are there any impacts of these proposals that we have not identified? Please outline any additional costs or benefits that you foresee.

Question 4

Are the descriptions of the magnitude of the impacts accurate? Please inform us where we have over or underestimated cost or benefit. We welcome specific quantifiable information to help bolster our understanding.

Question 5

Do you have any suggestions for reducing or mitigating the costs associated with these proposals?

Innovation

The proposals may have mixed effects on innovation within the qualifications market.

Retaining the reform criteria for V Levels may reduce the number of awarding organisations able to enter the market compared to a position without the additional recognition requirements. This could reduce competitive pressure and, in turn, limit incentives for some forms of innovation in qualification design, assessment and service delivery in the short term. However, the proposal is intended to support delivery reliability whilst consistent standards across awarding organisations are established, reflecting the high-stakes nature of these national qualifications.

By contrast, reverting to the original Criteria for Recognition for Foundation and Occupational Certificates may support innovation by improving opportunities for market entry and enabling a wider range of awarding organisations, including specialist providers, to participate in the market. Increased competition may encourage innovation in qualification design, assessment approaches, student support and the service experienced by centres.

Overall, the proposals are not expected to have a significant direct impact on innovation. Any effects are expected to arise indirectly through changes to market entry conditions, competition and the incentives faced by awarding organisations.

Question 6

Do you have any comments on the impact of the proposals on innovation by awarding organisations?