16 to 19 funding: programme cost weighting changes

We will increase programme cost weightings in the 16 to 19 funding formula for 6 sector subject areas for 2020 to 2021 academic year.

Programme cost weightings (PCWs) are one element of the 16 to 19 funding formula used to calculate 16 to 19 funding allocations. PCWs recognise that some subjects cost more to deliver.

Each academic year, we publish a list of the current PCWs for each sector subject area in the funding rates and formula guidance.

For academic year 2020 to 2021, we will increase PCW factors for 6 subject areas. The 6 subject area tier 2 codes and descriptions are as follows:

  • 2.1 Science
  • 4.1 Engineering
  • 4.2 Manufacturing Technologies
  • 4.3 Transportation Operations and Maintenance
  • 5.2 Building and Construction
  • 7.4 Hospitality and Catering

We are providing the details now to give providers time to plan. We will update the funding rates and formula guidance for 2020 to 2021 before March 2020.

On 31 August, the Chancellor announced £400m extra funding for 16 to 19 education. This included £120 million to help deliver expensive but crucial subjects.

This part of the additional funding has 2 elements:

  1. an increase to PCWs for some subjects and
  2. the introduction of the High Value Courses Premium.

Responding to today’s announcement, James Kewin, Deputy Chief Executive of the Sixth Form Colleges Association said:

“When the £120 million increase for ‘expensive but crucial subjects’ was announced ahead of September’s spending round, we were concerned that only the minority of students that pursue a technical course would be likely to benefit. Since then, we have been making the case for A levels and Applied General Qualifications that meet the high cost/high value criteria to be eligible for this funding, so we are delighted by today’s announcement.

“The high-wage, high-skilled economy envisaged in the government’s Industrial Strategy will be driven by leaders, scientists, technicians, engineers and others who in most cases will have followed the A level or Applied General path during their 16 to 18 education. Targeting the £120 million at some of these courses is therefore a welcome development.

“Although we remain convinced that the optimum way to increase investment in sixth form education is by raising the national funding rate to the required level - at least £4,760 per student - ensuring that targeted interventions like this benefit students pursuing a mainstream sixth form education is the next best policy”.

Changes to PCWs

PCWs provide an uplift for subjects that cost more to deliver. There are currently 4 PCW factors used in the 16 to 19 funding formula:

  • Base (1)
  • Medium (1.2)
  • High (1.3)
  • Specialist (1.75)

For 2020 to 2021 academic year, we will introduce 2 new PCW factors:

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  • Low (1.1)
  • Very High (1.4)

The PCW factor for study programmes with their primary activity in:

  • ‘Transportation Operations and Maintenance’, ‘Building and Construction’ and ‘Hospitality and Catering’ will increase from Medium (1.2) to High (1.3)
  • ‘Engineering’ and ‘Manufacturing Technologies’ will increase from High (1.3) to Very High (1.4)

We have taken a different approach for increasing the PCW factor for Science as the majority of students are on A level study programmes. A level programmes do not have a single core aim to indicate the primary activity of a study programme as they have several similarly sized aims. As a result, the Low (1.1) PCW factor will apply to any study programme with a vocational core aim in Science or a study programme consisting of 2 or more Science A levels.

Why we are changing the PCWs

We have based the PCW factor increases for these 6 subject areas on evidence and feedback from providers which suggests they are insufficiently weighted at present.

At the last review of PCWs in 2013, providers told us that the current PCW factors for these subject areas do not reflect their higher costs.

Feedback from providers in the review of PCW in 2013 has been backed by recent research by the Gatsby Foundation in 2018 and Association of Colleges in 2019. The Association of Colleges published a summary of the findings from this research on its website.

The government also commissioned research in 2018 that examined the income and expenditure of further education college departments delivering different subjects. The research found evidence of the high delivery costs of these 6 subject areas compared against the costs of other subject areas to deliver. It also found that departments in some high cost subject areas were less likely to meet the full costs of delivery including contributing to the running costs of the college.

Review of PCWs

The additional funding for colleges and school sixth forms to support them to deliver expensive subjects is a new approach for 2020 to 2021. The government will work closely with the sector to evaluate and review this approach post 2020-21 to make sure it is delivering improved outcomes for young people and is supporting colleges and sixth forms to offer valuable technical and vocational courses.

More specifically, the government is now reviewing PCWs as indicated in the now closed T Level funding consultation. The increases to the PCW factors for the 6 subject areas for 2020 to 2021 academic year are interim changes based on the available evidence in advance of the PCWs review due to report in 2020. This review will gather new evidence and examine the PCW rates across all subject areas to determine the PCW factors for 2021 to 2022 academic year onwards. It could result in further adjustments (increases or decreases) to the PCW factors for all subject areas, including those that we have increased for 2020 to 2021 academic year. We aim to consult with providers during 2020 and there will be an opportunity for providers to input their views as part of the review process.

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