1. What the budget means for colleges Julian Gravatt, Assistant Chief Executive 17 March 2016

2. What I’ll cover Outline The March 2016 budget The Education White Paper College funding latest

3. 2016 budget headlines Public spending plans UK economy by 2020 1.5% smaller than last forecast Target still to reach a £10 bil surplus by 2020 £3.5 bil public spending cuts (as yet unspecified) £2.0 bil higher employer pension contributions 77 measures on the tax & spending scorecard 2015 spending review still sets the course for government Devolution Flexible unringfenced budgets for mayors with devolution deals

4. 2016 budget headlines Department for Education Every school to become an academy by 2022 National school funding formula in place by 2019 Sugar drink tax (c£500 mil) used to double primary school sport premium and extend secondary school day Adrian Smith review of 16-18 maths Department for Business No student number controls for private HEIs in 2017 Even more student loans (for PhDs) and more data Levy paying employers able to get 10% extra in funding

5. DfE revenue spending Notes DFE budget up 2% a year but pupil numbers up c1.5% a year School funding per pupil up c4% a year between 1998 and 2014 Funding for longer school day in some secondary schools National school funding formula in place by 2019-20 Consultation now; details in summer 2016; changes in 2017-18 DfE RDEL (£ bil)2015-162016-172017-182018-192019-20 Autumn statement 53.654.455.556.457.1 Average 1.6% +1.4%+2.0%+1.6%+1.2% March budget 53.354.655.957,057.7 Average 2.0% +2.4%+2.3%+2.0%+1.2%

6. Education white paper highlights School reforms Five year plan to recast the system (new legal framework) More MATs, more talk of system leaders, more data More school-based ITT, replacement of QTS Issues for colleges Policies on careers, routes & skills on their way Reduced council role – issues in high needs, transport etc Mainstream schools accountable for alternative provision Changes to Ofsted inspections for schools (and colleges?) “UTCs are a type of free school”. Plans for more

7. EFA funding Well developed system in 2016-17 National base rate protected Marginal changes to the formula Data drives the process; business cases by 8 April Bursary allocations imminent Changes in the pipeline Paper on technical education routes (possibly April) Firmer information on national school formula New high needs funding distribution in 2017-18 16-18 Maths review (Prof Adrian Smith)

8. Skills devolution Deals with skills (the AEB) Sheffield City Region. Tees Valley North East, Liverpool City Region West Midlands Deals without skills London, Greater Manchester, West Yorkshire, Cornwall New deals West of England, East Anglia Greater Lincolnshire

9. Apprenticeships for large employers (c25,000) Large employer Apprentice Registered Training Organisation HMRC Digital Apprenticeship Service Skills Funding Agency Levy (0.5% of payroll) Payment on confirmation of training (ILR) and employer authorisation Employer directs recipient and price

10. Apprenticeships for smaller employers (c100,000) Smaller employer Apprentice Registered Training Organisation Digital Apprenticeship Service Skills Funding Agency Payment on confirmation training and employer payment (both via ILR) The priority in designing employer routed funding will be the levy-paying employers If employers aren’t paying the levy, they pay directly

11. SFA funding Simplify and localise in 2016-17 2016-17 is last year before the levy/voucher system starts Adult Education Budget (AEB) merges budgets Fewer eligible students = funds available Outside entitlements, qualifications not essential Allocations imminent and will come with geographical data Local commissioning discussions expected to happen In pipeline for 2017-18 Devo deals promise freedom to move funds in 2017 National procurement of non-college AEB provision

12. Funding in the future School grants (£32 bil/yr EFA to Academies direct in 2019 Levy funded And SME co-funded Apprenticeships (£2 bil/yr by 2018 16-18 grants (£6 bil via EFA) HE (and FE) Student Loans (£20 bil/yr by 2020) Private & International Fees High Needs (£5 bil/yr via councils) Adult Education (£1.5 bil, via SFA & Mayors) High cost HE (£1 bil via HEFCE) Other Govt contracts (eg MoD, ESF)

13. Area reviews & timetable Lots of activity between October 2016 and March 2017 Restructuring facility open until March 2019 (Waves 1&2: March 2017) Many Wave 1 reviews won’t finish until May-July 2016 Wave 2 reviews will start finishing in early autumn 2016 SFC conversion applications by end 2016 for completion by July 2017 College mergers need 9-12 months. Pipeline building up StartReviewsSFCsFECsColleges Autumn 2015 1733488126% Spring 2016 2155410015450% Summer 2016 3226715021770% Autumn 2016 4298318526886% Spring 2017 53792218310100%

14. Some thoughts for the next few months What we know 1.Stability in 16-18 funding system alongside a school system starting on the white paper reforms 2.Major apprenticeship reforms (the levy, standards) with several more months of uncertainty and possibly delays 3.Skills devolution creates new sources of decision-making. 4.No let up in public spending pressure 5.EU referendum makes national policy making less certain 6.Area review objectives are valid but questions about implementation & role of councils 7.Short-term challenges often the most important (results, Ofsted, morale, recruitment)