From education to employment

Additional £570 million needed for 16-18 education just to keep up with the rising population of young people

Imran Tahir, Research Economist at IFS

@TheIFS: Big increase in student numbers means additional spending on sixth forms and colleges has done little to reverse decade of cuts in funding per student 

In addition, rising student numbers in colleges and sixth forms mean that an extra £570 million, on top of extra funding allocated for 2020, will be required in 2022 to prevent a further fall in spending per student.

Any further falls in spending per student could create immense resource challenges for colleges and sixth forms given that they have faced the biggest cuts of any education sector over the past decade.

At the same time, the share of 16- and 17-year-olds in apprenticeships fell to a historical low of 3% in 2020, with a 30% fall in numbers in 2020 alone. This reflects both the effects of the pandemic and a gradual reduction in take-up over the long run.

These are the main conclusions of a new briefing note ‘Further education and sixth form spending in England’ by researchers at the Institute for Fiscal Studies, published today (18 Aug) and funded by the Nuffield Foundation as part of a wider programme of work looking at trends and challenges in education spending.

Other key findings include:

  • The share of 16- and 17-year-olds in full-time education rose to a historical high of 85% in 2020. This follows a long-term rise in participation in full-time education, and especially large rises in 2020 due to abnormally high GCSE results and reduced opportunities outside of education during the pandemic. Given GCSE results this year, there is likely to be a further jump in participation next year.

  • The number of 16- and 17-year-olds studying A levels or equivalent Level 3 qualifications rose, while the number doing apprenticeships fell by 30% or 15,000 between 2019 and 2020. An unprecedented 68% of 16- and 17-year-olds in education studied for an A level or equivalent Level 3 qualification, with a 3 percentage point rise in 2020 alone. About 37% were taking A levels, 10% were combining them with other Level 3 qualifications, such as BTECs, and 21% were taking Level 3 qualifications other than A levels. However, due to social distancing constraints and the economic uncertainty created by the pandemic, only 3% of 16- and 17-year-olds took apprenticeships in 2020 – the lowest since at least the 1980s. Over much of the last decade, the share taking an apprenticeship or other work-based learning was 5–6%, and it was 5–10% over the 2000s.

  • Colleges and sixth forms have seen the largest falls in per-pupil funding of any sector over the past decade. Funding per student aged 16–18 fell by over 11% in real terms between 2010–11 and 2020–21 in further education and sixth-form colleges, and by over 25% in school sixth forms.

  • The government allocated an extra £400 million to colleges and sixth forms in the 2020–21 financial year. At the time, the Secretary of State for Education said that ‘I’m really pleased that today that government is giving our sixth forms and colleges a major funding boost – the single biggest annual uplift since 2010’. Whilst true, with student numbers growing by 5% in 2020 alone, this at best restores funding back to 2018–19 levels, leaving most of the cuts over the last decade in place.

  • We calculate that an extra £570 million will be required in the 2022–23 academic year just to keep funding per student at the level it was in 2020–21. This figure accounts for the expected rise in inflation and a 6% rise in student numbers. However, more funding may be required if there are further increases in the rate of participation, which seems likely given the further rise in GCSE scores in 2021.

  • Colleges and sixth forms will need even more than that if they are to respond to the major long-run challenges they face, which include helping students catch up on lost learning during the pandemic and a total projected rise of 17% or 200,000 in the number of 16- and 17-year-olds between 2019 and 2024.

Sector Response

Imran Tahir, Research Economist and co-author, said:

‘Despite extra funding in 2020, colleges and sixth forms face immense resource challenges. The additional funding in 2020 only takes funding back to 2018 levels, leaving in place the vast majority of the cuts to funding per student over the previous decade. These institutions now also face a plethora of additional challenges created by fast rises in student numbers and the need to help pupils catch up on lost learning. The government will need to allocate at least an extra £570 million in funding for the 2022–23 academic year as compared with 2020–21 just to keep per-pupil spending at existing levels.’

Cheryl Lloyd, Education Programme Head at the Nuffield Foundation, said:

‘Apprenticeships are an important part of the qualification landscape, providing young people with the opportunity to learn new skills in a paid job while studying. While more young people are now continuing in education and training after the age of 16, there has been a substantial fall in those taking apprenticeships. Without further action, some of this decline could become permanent. To reverse this trend, more support is needed for students, education providers and the businesses. The wider funding system should be designed to incentivise and support apprenticeship opportunities with, for example, protected funding for 16- to 18-year-olds and additional support for disadvantaged learners.’

Chief Executive of Association of Colleges, David Hughes said: 

“Today’s report from IFS echoes our own recent report – Forecasting 16 to 18 education growth to 2030 – which clearly showed how demographic growth will need significant funding if every young person is to have the education they deserve. IFS estimate that government needs to spend an additional £570 million on 16-18 education just to keep up with the rising population of young people, the rising numbers staying in education to 18 and inflation. It is baffling that DfE does not publish official annual data on this and the risk is that the increase in numbers will not be factored into spending plans going forward. 

“The lagged funding methodology makes it increasingly difficult for colleges to cater to every student during times of population growth and even more so when there are also reduced opportunities in the labour market and on apprenticeships. There is an urgent need for DfE to guarantee full funding for every student recruited by schools and colleges this autumn, much the same way they do for universities as well as seek a commitment in the spending review to a longer-term revenue and capital budget that anticipates demographic trends.”

James Kewin, Deputy Chief Executive of the Sixth Form Colleges Association, said:

“Today’s report provides further evidence that sixth form education should be a priority area for investment in the forthcoming spending review. After a decade of funding cuts and cost increases, sixth forms and colleges are now also dealing with a surge in demand for places while providing catch up support to students following the pandemic. The government cannot continue to fund sixth form education on the cheap. The spending review provides the ideal opportunity to move away from the current model of inadequate, single year funding settlements, to a multi-year funding model where sixth forms have the resources to provide every student with the high quality education and support they need. Focusing on the base rate of sixth form funding is essential – the sort of micro interventions favoured by ministers that focus on specific qualifications will continue to have a micro impact – it has never been more important to raise the rate for all students”.

Toby Perkins MP, Labour’s Shadow Minister for Further Education and Skills, said:

“Colleges and sixth forms have experienced a decade of neglect from Conservative governments which have undervalued and undermined the incredible education they provide.

“Skills and retraining should be a vital part of our economic recovery, but under the Conservatives the number of 16 and 17 year old apprentices has fallen to their lowest level since the 1980s.

“Labour has set out a plan to create 100,000 new apprenticeship opportunities for young people harnessing their skills and capabilities to fuel our economic recovery post-pandemic.”

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