Is 63% pass rate bad?

It isn't in my view, it shows that things are working the way they should be and that Functional Skills has rigour and isn’t the easy option.

Lets be clear about the process too, learners are almost always entered at the level above that indicated by an initial assessment so 63% clearly shows progression - often in a few months instead of 2 years - our research shows an average time from initial assessment to qualification of about 8 months.
Compared to GCSE where the re-sit pass rate for the same group of 16-19 year olds is about 7% – Functional Skills 63% first time pass rate shows a significant improvement.
And unlike GCSE which has just two windows of opportunity per year, Functional Skills can be re-taken pretty much on demand.  63% is the first time pass rate, I believe the stats show that this increases to more than 80% when further attempts are included.

Functional Skills is the qualification of choice for employers - something that the ETF results showed recently.

So lets celebrate significant progress instead of wondering why not everyone passes - Functional Skills isn't Key Skills!