The government has announced a shake-up of T-levels, its “gold standard” vocational qualifications in England, which have been dogged by disappointing uptake and high dropout rates.

The reforms, to be introduced in January, will bring in significant changes to the industry placement element of the two-year qualification, which offers practical, hands-on work experience but has proved difficult to deliver.

From next year, up to 20% of the placements can be completed remotely, rather than having to go to a physical workplace, with up to 50% completed remotely for those studying the digital technology T-level. Students will also be expected to gain workplace skills by doing “simulated activities” in the classroom.

T-levels were introduced in September 2020 as a high-quality vocational equivalent to A-levels. A single T-level is worth the same Ucas points as three A-levels, and the 45-day industry placement is regarded as central to its appeal.

There have, however, been problems finding sufficient employers willing and able to host students, and some students have complained their placements were not relevant to the course they were doing.

Dropout rates have also caused concern. While retention rates for most A-level students consistently top 90%, only 71% of the 10,253 students who started a T-level in 2022 completed their studies.

“We’re afraid that the 45-day industry placement, while a laudable aim, is crashing against the shores of reality,” Kevin Gilmartin, the post-16 specialist at the Association of School and College Leaders (ASCL), said. “These placements require a big commitment from employers and it’s therefore not surprising that they can be difficult to secure.”

The new hybrid arrangement will be available from January to students on all T-level courses except education and early years, and dental nursing, which have specific requirements related to licences to practice.

The relaxation of the rules also means placements will “no longer be restricted to the specific T-level subject being studied by students”, allowing them to “gain experience across related subjects within their chosen route”.

Jacqui Smith, the minister for skills and apprenticeships, said: “We are cutting red tape to make it easier than ever for employers and providers to take part in T-level industry placements while ensuring students benefit from meaningful, high-quality experiences.

“We’ve listened to businesses and these changes reflect what they need to help them offer T-levels and our missions of boosting economic growth and breaking down barriers to opportunity.

“Whether it’s offering remote placements in the fast-evolving digital sector or enabling more simulated environments for industries like engineering, we’re giving students more opportunities to gain the skills and experience they need for their future careers.”

One of the key concerns about the T-level rollout has been its impact on other vocational qualifications. Plans by former Conservative governments to streamline post-16 education meant many BTecs would lose funding to make way for T-levels.

Days before the first changes to funding were due, the education secretary, Bridget Phillipson, announced a rapid review of the plans, due to report in the next few weeks. On Tuesday MPs on the education select committee will question experts on the potential impact of changes.