1. Funding Education Changes and Trends
FETN Network Conference
18 November 2016
Kevin Street
Senior Manager Funding Development

2. Outline Skills Plan and Technical Education
16/17 update and 17/18 forward look
Area Reviews and Financial health
Student Support and HNS
Apprenticeships
Future Funding and challenges ahead

3. Vision (1): We are reforming Technical Education in England
We have sought advice from an independent panel of experts
Panel chaired by Lord Sainsbury of Turville, former Parliamentary Under-Secretary of State for Science and Innovation(1998–2005)
We have engaged a wide range of stakeholders to test the proposed approach to reforming technical education.
We have accepted the recommendations of the independent panel of experts
The government response, set out in the Post-16 Skills Plan, accepts all 34 of the panel’s recommendations, “unequivocally where that is possible within existing budgets”, and commits to carefully assessing the case for those recommendations with wider financial implications.
The Post-16 Skills Plan has been published
The Post-16 Skills Plan was published on 8th July 2016
The Plan was widely welcomed:
‘The Skills Plan offers colleges a distinctive cornerstone product that plays to their undoubted and considerable strengths’. AoC
‘Giving young people clarity on where technical routes can lead them and the career opportunities they open up is essential if we are going to meet future skills needs.’ CBI

4. Vision (2): The Post-16 Skills Plan explains how we will create a coherent technical education system fit for the twenty-first century

5. Reforms (1): A new technical education option with a reformed and simplified system of 15 routes - grouping related occupations together
Construction
Bricklayer/mason
Electrician
Building/civil engineering technician
Construction supervisor
Carpenter/joiner
(1,625,448)
Agriculture, Environmental and Animal Care
Park ranger
Conservationist
Agricultural Technician
Horticulturalist
Farmer
(454,726)
(2,204,478)
Business and Administrative
Office manager
Human resources officer
Administrative officer
Housing officer
Catering and Hospitality
Chef
Events manager
Catering manager
Butcher
Baker
(568,998)
(1,060,804)
Childcare and Education
Nursery assistant
Early years officer
Teaching assistant
Youth worker
Creative and Design
Arts producer
Audio-visual technician
Journalist
Upholsterer
Graphic designer
(529,573)
Digital
Programmer
Software developer
Network administrator
Web designer
IT technician
(351,649)
Hair and Beauty
(293,004)
Hairdresser
Beauty therapist
Barber
Engineering and Manufacturing
Vehicle mechanic
Engineering technician
Energy plant operative
Process technician
Aircraft fitter
(1,319,645)
Legal, Finance and Accounting
(1,325,482)
Paralegal
Accounting technician
Financial account manager
Legal secretary
Payroll manager
Health and Science
Dental nurse
Laboratory technician
Pharmaceutical technician
Sports therapist
Nursing assistant
(915,979)
Route name
Examples of occupations to which the route could lead
(Number employed in occupations within route, excluding graduate roles)
Social Care
Care worker
Residential warden
Welfare counsellor
Probation officer
Home carer
(865,941)
Transport and Logistics
Ship’s officer
Railway signalling technician
HGV driver
(589,509)
Protective Services
(398,400)
Police officer
Non-commissioned officer
Maritime operations officer
Fire service officer
Sales, Marketing and Procurement
Buyer
Procurement officer
Sales account manager
Market research analyst
Estate agent
(957,185)
We expect these routes to be delivered primarily through apprenticeships. 5

6. Spending Review 15 Outcomes for the sector
Adult Settlement
AEB protected in cash terms + flexibility
Advanced Learning Loans eligibility extended
Levy to support increased Apprenticeship numbers
Policy backdrop: effectiveness, simplicity, localisation
16-19 Settlement
Stable medium term framework
National funding rate –For FT 16/17 YOs protected
Savings of £160m/FY by 2019/20
The majority via the removal of formula protection funding

7. 16-19 Study Programmes
Substantial (nearly 50%) increase in Substantial L2 Qualifications over two years since 12/13
Continued ( 6%) increase in Substantial L3 Qualifications over two years since 12/13
Increase in Substantial work experience (7% to 10%) and small increase in Employment Enrichment and Pastoral hours (17% to 18%) in one year since 13/14
Continued increase in students on full-time programmes in line with RPA

8. English and maths
In 2014/ % had A*-C, were exempt or were studying towards it
GCSE enrolments up from 2014/15 to 2015/16
English up around a third
Maths up by just over 50%
Students 17+ achieving grade A*-C increased. Between summer 2012 and summer 2016:
English up by 13,000 (64%)
Maths up by 21,000 (70%)

9. Maths and English condition of funding
Reductions to 17/18 allocations will only apply to:
institutions where more than 5% of students (by value) without A* to C GCSE in English and/or maths did not enrol on an approved qualification; and
will be applied at half the national funding rate, rather than 100% as originally planned
Institutions that are not compliant will be required to submit a compliance plan.

10. Changes - 16-19 Allocations for 16/17
Cohort down by c.39,000 (2.1%)
Student numbers down by c.36,000 (2.8%)
Programme Funding down by £119m (2.2%)
Formula Protection Funding down by £54m (56%)

11. 16-19 Allocations 2016/17

12. Adult Allocations 2015/16 to 2016/17

13. Financial Health
Proportion of colleges reporting an operating loss = 48% up from 38%
Median operating profit = 0.1% down from 0.7%
Plans for 2016/17 indicate increased income decreased borrowing
Trends in FH in FECs creeping from Good/Outstanding to Satisfactory
But FEC numbers in inadequate stable at 33
Trends in SFCs creeping from Outstanding to Good
Only 1 SFC in inadequate down from 4

14. Student Support in 2017/18
Free meals at further education funded institutions
Allocations will be generated based on 2015/16 and 2016/17 ILR data returns.
We will make an adjustment (to cater for the amount of double funding for meals funded from the Bursary Fund) as we did last year. The resulting deduction will be subtracted from discretionary bursary allocations.
Help with childcare and residential support
Residential support allocations – for specialist provision/provision not available locally – will be made based on 2015/16 end of year data where appropriate.
Care to Learn – to help with costs of childcare whilst young parents are in education – remains available via application from the SBSS.

15. 16-19 Bursary Fund
Institutions will continue to draw down funds for the vulnerable bursary from the Student Bursary Support Service (SBSS)
Allocations for discretionary bursaries calculated based on the number of students receiving £30 EMA in 2009/10, as a percentage of the institutions 2010/11 funded student numbers.
There is no longer a ring-fence between free meals in FE and the 16 to 19 Bursary Fund
Institutions can carry unspent funds from 2016/17 over to 2017/18.
Institutions should contact EFA to ask to return any funds from 2015/16 if they are still holding these.
Funds carried forward cannot be added to general institution funds. Institutions must continue to use the funding to support students in line with the scheme guides.

16. High needs 2017/18 Changes for 2017-18
High needs block baseline* for £5.7bn distributed to LAs
EFA will directly fund:
schools; place costs deducted from LAs (i.e. from the £5.7bn)
FE providers; place funding will be deducted from LA budgets after £125m transfer from post-16 into DSG
SPIs and NMSS; no change, funded centrally and not deducted from LA budgets.
2017/18 place notification process
In process; LAs return deadline 25 Nov 16 to EFA
Important for institutions to contact and engage with their LAs
FE College ‘cross LA border’ mergers factored into process. No LA will be financially disadvantaged – summary with worked example in published guidance.
Aware of some cross LA border commissioning issues, where a ‘home’ local authority is considering whether to increase the high needs places in a further education institution as a result of significant growth in commissioning from other local authorities. Institutions should record any concerns in writing with their home LA.
Outcomes due publication end of Jan 17 with place numbers included in funding allocations from end of Feb 17

18. Apprenticeship spending
Per year in England, £bn
Apprenticeship spending will reach £2.45bn in England by 19-20
This is more than double the amount spent in 10-11
*Forecast
Scotland, Wales and Northern Ireland will receive a share of the levy, and will take decisions on how that will be spent

19. Top 400 employers
There are around 170 public sector employers in the top 400.
Many of the top 400 already recruit apprentices, but around 35 have had no apprentices in recent years
Around 200 of these employers had fewer than 50 starts last year

20. College delivery to employers
Employer delivery of more than 5 apprenticeships is very limited
Large employer deals on the whole delivered by non-colleges

21. Additional learning support Disadvantaged areas uplift
Providers and employers training year olds will receive £1,000 payment each. For frameworks, the government will provide a transitional 20% uplift. Also applies to year olds formerly in care or have Education and Health Care plan
Small employers
Employers with fewer than 50 employees will have 100% of the training and assessment costs covered when training a year old or year old formerly in care or has a Local Authority Education, Health and Care plan
Funding bands
All existing apprenticeship frameworks and standards have been placed into one of the 15 funding bands, with the upper limit of those bands ranging from £1,500 to £27,000. Employers will negotiate a price for their apprentice’s training and assessment
Additional learning support
We will pay training providers £150 a month to support learners with learning difficulties or disabilities that require additional learning support
Funding policy
Disadvantaged areas uplift
Training providers will receive additional payments for training apprentices who live in the top 27% deprived areas. £600 for top 10% of deprived areas, £300 for next 10% range and £200 for the next 7% range
Co-investment
Employers that do not pay the levy or do not have sufficient funds in their levy accounts will need to contribute 10% of the training and assessment cost, the government will pay the remaining 90%
English & maths
To meet minimum standards of English and maths we will pay training providers £471 for each of these qualifications (Level 1 and 2)
Prior qualifications
Levy funds and co-investment can be used to fund an individual undertaking an apprenticeship at the same or lower level provided they will acquire substantive new skills

22. Register of Apprenticeship
Training Providers
Launched on 25 October and closes at 5pm on 25 November
Main principles:
Must deliver apprenticeship training
There are three different application routes - main providers, employer providers and subcontractors building capacity
GFE colleges exempt from financial health assessment
Subcontractors delivering below £100,000 not required to apply
Results will be communicated by 6 March 2017.

23. Financial and Other challenges
Finance, LGPS Revaluation, Bank Lending,
Insolvency regime
Apprenticeships funding, quality and volume
Sub contracting incl Apprenticeships
16-19 Demographic decline
Area Review Implementation
Skills Plan developments (eg routes, Transition year, Work placements 1-3 months, etc)

24. Adult Forward Look for 2017/18
What
we know
Apprenticeship reform and development of digital apprenticeship services
Changes to advanced learner loans
Greater focus on disadvantage and social mobility
Establishment of Institute for Apprenticeships
Competitions
What we need to decide
Response to Autumn Statement
Review policy and postcode approach to funding disadvantage
Evaluation of provider register and continuing review of sub-contracting
Arrangements for devolving AEB

25. 16-19 Forward Look for 2017/18 What we know No major changes expected
Formula Protection Funding continues to be phased out in the same way as for 16/17
What we need to decide
Response to Autumn Statement
Next Steps on savings if necessary
Funding policy development to support Sainsbury routes
How to adapt the English and Maths Condition of Funding as new GCSE grading is introduced

26. GOV.UK links to useful information
16-19 Funding how it works factsheet Funding guidance Student Support Allocations High needs funding arrangements for 2017/18: The local authority place change request process documents are published in this location. DSG baselines and funding tables published by DfE as part of the announcement on 2017 to 2018 funding for the schools block and high needs block in July Establishes 2016 to 2017 baselines, adds in the post-16 and ESG transfers to inform the DSG funding for each LA. Final funding allocations will be communicated in December High needs place number allocations to institutions: Excel spreadsheets of allocated high needs place numbers to institutions from 2012/13 to 2016/17 academic years.