The continued decline of the number of higher-level vocational qualifications in England is “bad news” for areas with skills shortages, a government adviser has warned.

Experts said the introduction of higher fees had “severely damaged” the demand for level 4 and 5 provision, while providers had neglected them.

Recent figures published by the Department for Education showed there were 48,500 entrants for level 4 and 5 qualifications to higher education institutions recognised by the English regulator, the Office for Students (OfS), in 2021-22.

This was down from 80,900 in 2015-16 – when comparable statistics began – and a record low for the period.

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The majority of level 4 and 5 entrants last year were at higher education providers, with a further 40 per cent at further education colleges.

Much of the decline in participation is driven by long-standing issues with the funding system, according to Imran Tahir, a research economist at the Institute for Fiscal Studies, but there are now additional factors at play.

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He cited the introduction of new qualifications such as skills bootcamps and T levels, which provide an alternative route to gaining a higher-level technical qualification.

And he said the government’s upcoming review of Level 4 and 5 courses could be creating uncertainty among providers about their future.

Part-time entrants at levels 4 to 5 saw the largest proportional fall from 2015-16 compared with all other National Qualifications Framework (NQF) levels.

David Phoenix, vice-chancellor of London South Bank University, said the introduction of higher fees in 2012 “severely damaged” the numbers interested in part-time study, a pathway many level 4 and 5 students choose.

Meanwhile, the current loan model – which is focused on funding a three-year degree – had reduced demand for those who had anticipated building these qualifications into a degree, he added.

“The fall in demand coupled with the higher cost of delivery due, for example, to the shorter cycle, means many higher education providers have focused on degrees and neglected level 4 and 5 courses.”

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Professor Phoenix said that, to increase the number of level 4 and 5 learners, the system must help more young people progress past level 2 and 3 qualifications – which would go a long way to “closing the skills gap”.

The total number of level 4 and 5 apprenticeship enrolments trebled between 2015-16 and last year.

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Baroness Wolf, the Sir Roy Griffiths professor of public sector management at King’s College London and an adviser to the UK government on levelling-up and skills policy, said an increase in the number of apprenticeships did not make up for the decline in institution-based qualifications – and both were needed.

“This is really bad news because higher national diplomas in particular tend to be offered in areas of acute skill shortage, notably construction and engineering,” said the crossbench peer.

“We argued in the Augar review that increasing level 4/5 provision was a priority, so [it’s] obviously not good to be going backwards.”

Ellie Russell, deputy head of policy at the University Alliance, said employers were working with universities to plug the high-level skills gap, which was estimated to amount to 2.6 million people by 2030.

However, she added that the growth in degree apprenticeships, which had been supported by a big drive from government and innovation on the part of universities, was a “national success story”.

Professor Phoenix said the rise in apprenticeship provision was linked to the introduction of the apprenticeship levy in 2017 and the increased appeal for students to learn and not accumulate student debt.

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A DfE spokesperson said: “We are transforming student finance to make it easier for more people to take level 4 and 5 courses, introducing maintenance loans for flagship higher technical qualifications from September 2023 to put funding on a par with degree courses for the first time.”

patrick.jack@timeshighereducation.com