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The future of further education funding (12/13 and beyond)

The future of further education funding (12/13 and beyond). NAMSS Annual Conference 12 March 2012. Nick Linford Managing Director of Lsect Managing Editor of FE Week. 2010-11. 2011-12. 2012-13. 16-19 Funding Statement (Dec 2012). YPLA Budget & Forecast Learner Numbers. £7.147bn.

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The future of further education funding (12/13 and beyond)

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  1. The future of further education funding (12/13 and beyond) NAMSS Annual Conference 12 March 2012 Nick LinfordManaging Director of LsectManaging Editor of FE Week

  2. 2010-11 2011-12 2012-13 16-19 Funding Statement (Dec 2012) YPLA Budget & Forecast Learner Numbers £7.147bn £7.171bn £7.214bn +0.3% +0.6% Appren -0.1% +6.9% £779m £833m £780m £2372m £2410m £2430m -2.4% S6Fs +0.8% FE £4009m £3957m £3962m Overall three years:Appren £ + 6.8% & learners + 11.6%S6Fs £ - 1.6% & learners + 5.4%FE £ + 1.3% & learners - 0.8% +1.2% +0.1% 1570 1528 1534 +2.3% +0.4% FY for £ and AY for learners (excl. 16-24 LLDD) Appren 240 +8.1% +3.3% 222 215 Also worth noting‘Minimal change in 2012/13’Transitional protection extendedSuccess factors protectedForecasted impact of RPAFinal allocation made end of March +3.6% +1.8% 441 449 465 S6Fs 865 872 863 -1% 0.2% FE

  3. 16-19 Funding Statement (Dec 2012) “In 2012/13 the YPLA is maintaining the demand-led funding formula without any changes” And in 2012/13 there will be no changes to SEN nor LDD funding But…. Index of Multiple Deprivation will be updated to calculate disadvantage uplift from the 2007 to the 2010 release (over 90% will feel impact of less than 1%) Transitional protection has been stretched over four years (until 2015/16) in equal instalments or at 3% per learner per year (which ever is the greater) = EFFICIENCIES NEEDED Consultation closed on 4th Jan regarding a new programme level 16-18 funding methodology to be introduced for 13/14

  4. 16-18 funding ~ allocations timetable

  5. of which min appren expectation 3.280m 3.129m 2.927m 2.818m 2010/11 2011/12 2012/13 2014/15 19+ Investment Strategy (Nov 2011) Adult Skills Budget £2.8bn £2.7bn -7% £2.5bn -5% £726m+7%incl. £42m loans £644m £698m+ £5% £2bn-9% £1.8bn-11% Overall three years:Non-appren £ -19%Appren min expectation £ + 13%All Adult Skills Budget £ – 12% £2.2bn 2011-12 2012-13 2013-14 Also worth noting‘Focus at least £100m on SMEs’£129m for non-appren loans 2013Impact of it being Single BudgetMCL unchanged for 2012 at £500kChanges to entitlement in 2012 Illustrative learner number forecasts But with a Single Adult Budget it’s could go in any direction!

  6. So what of 2012/13? Less funding, but quickly moved in single budget to those that can delivery priorities More ‘freedoms’ in form of colleges legally not being part of the Government estate Outcome Incentive Payment seem to have been scrapped/redefined…. Significant changes to entitlement (fee eligibility). L2 and L3 23 year olds and below No change to funding rates or methodology

  7. 200,000 160,000 120,000 16-18 19-24 80,000 40,000 25+ 0 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Apprenticeshipgrowth Train to Gainreduction What next for apprenticeships? ~ Under 19 up 14,900 (+ 13%)~ 19-24 up 29,600 (+ 26%)~ 25+ up 133,000 (+ 271)%~ Overall up 177,500 (+ 63%) 182,080 143,430 131,700 In Nov the IPPR called for an end to 25+ apprenticeship funding Minister has announced 16-18 minimum duration. And 19+? 19-24 BIS Select Committee is currently taking evidence 45+ 25-44

  8. Summary of the 2013/14 proposals First edition published in October This edition published last Thursday Contains non-apprenticeship rates Rules for Job Outcome Payments Shadow calculations to be in LIS Implementation for 2013/14

  9. Rates ‘matrix’ Originally 30 incl. apprenticeships  Now 40 excl. apprenticeships PWF of 1.92 retained for some providers Based on number of credits (learning time) In partnership with

  10. Rates shown as ‘loadband’ with cliff edges

  11. Modelling the impact on rates Example 1 So if at top of the QCF credit band it’s a funding cut and at the bottom of the band it’s a funding rise

  12. Other proposals Single earnings methodology = in-year delivery (no more provider factor) Both Disadvantage Uplift and Area Cost Uplift remain unchanged Achievement will be worth 20% of the funding Outcome Incentive Payments appear to have been scrapped Job Outcome Funding piloted as 10% when learner does not achieve (!) Funding to be capped at £4,400 (unweighted), down £176 (-4%) Colleges will continue to be paid on profile, subject to year-end reconciliation

  13. PlannedSchedule

  14. Oh, and FE Loans ~ the plan All 24+ LR (classroom) and ER (workplace) funding L3+ to be funded out of loans allocation from 2013 E.g. Apprentice takes out the income contingent loan, and pays back 9% of all earnings above £21k + 3% RPI (written off after 30 years) Learners can start applying from March 2013 YOU liaise with Student Loans Company

  15. Seems clear to me this is what the future holds, but for the well informed and responsive colleges this presents plenty of opportunity Will the FE funding future be… ~ More complicated ~ More competitive ~ More uncertain Or ~ Stable ~ Simple

  16. Q&A Nick Linford, Lsect161-165 Greenwich High Road London, SE10 8JA Tel: 020 8123 4778 Mobile: 07899798270

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