From education to employment

Countdown to 16-19 funding transfer

Stephanie Mason is a partner in the education group at accountants Baker Tilly

Following the enactment in November of the Apprenticeships, Skills, Children and Learning Act, the responsibility for commissioning and funding 16-19 education and training is set to transfer to local authorities from 1 April this year. The funds involved are some £7 billion currently administered by the Learning and Skills Council.

There has been much concern in the sector as to whether local authorities are ready for their new responsibilities and indeed how they are manifested. Concern seems to be more from providers (not just sixth form colleges but general FE colleges and training providers) than from local authorities: understandably so from both points of view.

The big question for providers is will they be paid in April.

Local authorities will have other concerns in the wide ranging children’s services directorate.

Pre-November there was a definite view from Local Authorities of: “let’s wait for the commissioning framework and that will answer all the questions.”

It gives us a bit more detail than the Act, but it is only a framework, not a full methodology.

There are still outstanding questions around what data will be requested by which bodies, how the accountability streams will work, where funding will come from if exceptional support is needed by sixth form colleges and how consistent with each other will local authorities be in practice.

Providers can draw some comfort from the fact that funding will be based on the national funding formula and applied at the level of the provider with funding following the learner. It could thus be argued that in the first year providers will see little change. Indeed the framework addresses 2011/12 not the coming year. Allocations for 2010/11 are planned to be made by the LSC before is ceases operations on 31 March, with local authorities shadowing arrangements.

Providers should be aware of the 16-19 Statement of Priorities and Investment Strategy 2010-11 published in January. The good news is that there is a 6 per cent increase in funds available. Growth in learner numbers in autumn 2009 will be consolidated and funding made available for further growth to over 1.6 million learners.

However, this comes at a price:

  • Only qualifications approved in section 96 of the Learning and Skills Act 2000 will be funded. This means that around 1,000 qualifications will be removed from funding
  • The base rate of funding per standard learner number (SLN) will remain at 2009/10 rates
  • There will be in-year adjustments to move funding from providers significantly under-delivering learner numbers against their allocation in the previous autumn to those over-performing. Effectively clawback now also applies to 16-19 provision
  • All foundation learning programmes, including E2E will be funded under the demand-led funding model
  • Where a provider has a particularly high SLN/high learner ratio actions will be taken to reduce it
  • Education Maintenance Allowance bonus will be dropped allowing the available funds to be spread across more learners

The education team at accountants Baker Tilly believes there are a number of actions that need to be completed by local authorities prior to April, i.e. in less than two months, to ensure there is a smooth transition:

  • Have facilities in place to pay education providers their monthly payment on 20 April
  • Have clear channels of communication with current and potential providers
  • Understand the ethos of colleges and the way they have worked with the LSC
  • Establish links with local employers and understand their needs
  • Identify existing 14-19 partnerships and other collaborative initiatives and become a member
  • Establish a clear role for staff joining from the LSC
  • Ensure at least one member of staff understands the funding methodology
  • Review membership of Children’s Trust
  • Understand progress on negotiations for funding allocations for 2010- 2011 – they are unlikely to have been agreed by 31 March 2010
  • Establish relationship with other members of the sub-regional group and agree responsibilities and objectives.

The transfer of funding control could well be used by the government to measure the effectiveness of local government in supporting education of 16-19 year-olds. Given the UK’s poor performance in Not In Education, Employment or Training (NEETs) tests (emphasised by recent OECD reports), this is a crucial reckoning point, not only for local government but for further education colleges and schools. April could prove to be a testing time.

Stephanie Mason is a partner in the education group at accountants Baker Tilly

Click here to read an FE News exclusive interview with Peter Lauener, chief executive of YPLA, about the funding changes

Related Articles