FE funding in 2020-1 2 September 2019 Julian Gravatt– deputy chief executive

2020-1 spending decisions Increases in 2020-1 Schools +£1.8 bil £3 billion extra in 2020-1 SCHOOLS BUDGET (£45.1 billion) Schools block £34.5 bil High needs £6.3 bil Early Years £3.5 bil Central services £0.5 bil Teacher pay grant £0.3 bil Schools +£1.8 bil Increases in 2020-1 5.8% Schools ..of which 12.6% high needs 4.7% rest of DSG 7.1% 16-to-18 Teacher pension grant Paid in addition High needs +£0.8 bil 16-18 SPENDING (£6 billion) SCHOOLS Three year settlement 5.7% rise in total schools budget 12.6% rise for High Needs 4.7% rise in Schools budget outside high needs Minimum secondary funding per pupil £5,000 in 2020-1 TPS funding and Pupil premium funding in addition 16-to-18 7.5% rise in 16-to-18 funding 4.7% rise in 16,17 base rates Programme weighting will rise New funds for GCSE resits Continuity for some smaller grants TPS funding in addition NOTES Based on government press releases, published data and a conversation with an officials Treasury and DfE work in financial years so 2020-1 academic year allocations will vary www.aoc.co.uk (funding pages) or julian.Gravatt@aoc.co.uk for more information. 16-to-18 via ESFA £5.6 bil 16-to-18 £0.4 bil

The £400 million increase Treasury have made very specific decisions £190 mil for core 16-18 funding National base rate (16.17 year olds) £4,188 (+4.7%) £120 mil to increase programme weights £35 mil for GCSE EM resits at Level 3 Continuity for various programmes (Advanced Maths Premium, workforce initiatives etc) Implications Boost for 16-18 in FE colleges; not just for T-levels Fall in 16-18 numbers in 2019 partly offsets rises 16-18 funding only part of college income

Some context

College income & expenditure 16-18 £3.1 bil HE £0.5 bil Teachers £2.2 bil Supplies and services £1.6 bil FE loans £0.1 bil Debt interest £0.1 bil High Needs £0.2 bil Fees £0.3 bil Other staff £2.1 bil Depreciation £0.5 bil Apprentices £0.5 bil Catering etc £0.6 bil AEB £0.8 bil £6.5 bil Income 86% from public sources 47% 16-18 64% staff cost ratio 5% education EBITDA 0.4% surplus/income Grants (incl ESF) £0.5 bil

College budgets in 2019-20 Income Fewer 16-to-18 students (demography) No allowance for inflation Cash-limited budgets (adult ed, apprenticeships) Competitors using cross-subsidies (schools, univs) Funding reform (adult education devolution) Expenditure Rising staff costs (staff turnover averages 17%) Pension contribution increases New costs (eg. OfS, JISC) & obligations (eg. careers)

What next? Events HM Treasury statement on 4 September Brexit scheduled for 31 October Full budget statement must happen by March 2020 OBR forecast accompanies full statement DfE and ESFA will now work through figures. DSG and 16-to-18 statement normally in December ESFA 16-to-18 allocations out in January 2020

Julian Gravatt. AoC deputy chief executive Any questions? Julian Gravatt. AoC deputy chief executive