1. Funding and the financial health of colleges
AoC National Conference
November 2014
Keith Smith
Skills Funding Agency

2. 2013 to 2014: new streamlined funding system
Allocated £1.5bn adult skills budget to colleges – of which £275m for adult apprenticeships plus £172m for loans
Priorities: apprenticeships, traineeships, English and maths and qualification reform plus agreement of 3 LEP accountability pilots
In-year growth process open to colleges – we recycled:
£65m for adult apprenticeships of which £16m went to colleges
£47.5m for traineeships of which £16.4m went to colleges
First year we performance managed against the apprenticeship ring-fence
Average adult apprenticeship delivery by colleges increased from 12% to 15% from 2012/13 to 2013/14…subcontracting?
205 colleges declared 2681 subcontracting relationships
Nearly 8 out of 10 loans are offered by colleges

3. 2013/14 to 2014/15 12% reduction in adult skills budget
21% increase in apprenticeship budget

4. Operating profits

5. Income and borrowing

6. Financial health

7. 2014 to 2015: employer ownership and local accountability
Allocated £1.3bn adult skills budget to colleges - of which £295m is for adult apprenticeships. In-year, to date we have also allocated:
£28m for adult apprenticeships of which £4m went to colleges
£4.9m for traineeships of which £1.3m went to colleges
£225m in loan facilities
Allocations based on past performance and managed against ring-fence
Apprenticeship Trailblazers underway – testing direct employer funding – plus ambition for 2 millionth apprenticeship
Service agreements in place with LEPs on capital and ESF
Continue to test local accountability models and how LEPs will influence or control the adult skills budget
Planning for new powers to be devolved to Manchester
Further controls on subcontracting should be expected

8. 2015 to 2016: implementation of agreed policies…but election looming…
Continued focus on apprenticeships, traineeships and English and maths
Further efficiencies in the adult skills budget expected
Higher apprenticeships and higher vocational skills will be a priority area
Skills funding confirmed after Autumn Statement through a grant letter to the Agency – allocations confirmed to sector in March 2015
2016/17 and beyond likely to reflect decentralisation of budgets and funding employers directly