The New Funding System 2008/09

Presentation to London CFDG

Nick LinfordHead of Planning, Funding and Projects8 November 2007

• What do we know so far?

• Summary of changes to the funding system

• 16-18 model

• Adult learner responsive model

• Employer responsive model

• The new demand-led funding formula

• Modelling the impact at sector level

• Modelling the impact at provider level

• What’s next and closing remarks

Presentation Contents

The New Funding System 2008/09

What do we know so far?

Initial aim of LSC in 2004 was to simplify FE funding formula

Three LSC funding formula consultations in as many years

Reform now widened to include FE, Apprentice, E2E, TtG and SSF

Modelling software (DLC) available to all FE providers

Changes to be applied for planning and funding 2008/09

New models and formula to be published next week?

HEALTH WARNING

The final changes have yet to be published and are subject to ministerial

(DCSF and DIUS) sign-off

Summary of changes to the funding system

2007/08 2008/09

Further Education

16-18 model

Adult learner responsive model

Employer responsive model

Apprenticeships

Entry to Employment

Train to Gain

* 16-18 apprenticeships planned and budgeted in 16-18 model (DCSF)

School 6th Forms

*

16-18 model

16-18 Further Education

16-18 model

Entry to EmploymentSchool 6th Forms

Strategic commissioning (Quality and 14-19 Partnership critical)

Transitional protection and no reconciliation

New demand-led funding formula with historical provider factor

Significant change for schools but likely to have higher rate per SLN

Funding via the LEA rather than the LSC from 2010/11

New products with new contracting arrangements (Diploma)

Adult learner responsive model

Adult Learner Responsive

19+ Further Education (excluding employer based NVQs)

Strategic commissioning (PSA targets and prioritisation are key)

Transitional protection likely to be +/- 2.5%

Mid-year and end-year reconciliation with tolerance and cap

New demand-led funding formula with historical provider factor

Co-funded SLN rates for those paying tuition fee (42.5% in 08/09)

Likely to have a lower rate per SLN than in the 16-18 model

New products being piloted such as FLT and Learner Accounts

Employer responsive model

Employer Responsive

19+ FE employer based NVQs

Primarily PSA targets in the form of NVQs and Skills for Life

Monthly payments in arrears on 10th working day of following month

New demand-led funding formula with actual not historical factors

Area Cost Uplift to be based on location of main enrolment

Train to Gain funding to be paid monthly with 25% for achievement

Interesting dynamic with switch in funding from FE (e.g. TtG A)

Co-funded SLN rate for those paying tuition fee (e.g. ESOL)

Apprenticeships (incl. 16-18) Train to Gain (incl. SfL)

The new demand-led funding formula

Simple at first glance

SLN could be listed or unlistedand has maximum per learner

£/SLN may be subject totransitional protection

PF has up to six elements,based on history (16-18 & adult)

or actual (employer model)

ALS allocations will include formula and negotiation element

Total funding has a cap

x

x

=

+

More complex in reality

Standard Learner Number (SLN)

National Funding Rate (£/SLN)

Provider Factor (PF)

Additional Learning Support (ALS)

Total funding

x

x

+

=

Oh, and three census dates replaced by minimum number of weeks

Modelling the impact at sector level

LSC analysis of the impact that the new funding formula will have on General FE colleges in 2008/09 via the 16-18 model:

If transitional protection is +/- 2.5% then 48% of colleges will need protection in 08/09, with 6% still not ‘harmonised’ by 11/12

Requires protection

Requires protection

Modelling the impact at provider level

The Demand Led Calculator (DLC) converts an FE 06/07 ILR into SLNs

But we don’t yet know:

The National Funding Rates

Approved SLN qualification values

The final Provider Factor (will be based on 06/07 8 Feb ILR F05)

The transitional protection %

And a great number of other technical uncertainties

So the DLC builds awareness, but I would suggest wecannot reliably model the impact at present

What’s next and closing remarks

DIUS/DCSF Grant Letter, LSC Annual Statement of Priorities (PfS 3) and descriptions of funding models published next week?

Soon we will begin completing the SSoA in the PaM system to include SLNs (taking account of 06/07 baselines, allocations and performance in 07/08 and of course 08/09 plans) The SSoA figures will become our targets for 08/09!

Clearly a significant change to all LSC funding systems, alongside even greater emphasis on priorities and performance measures (e.g. MLP, FfE and mid-year reconciliation)

DLC version 3 released to include final SLN values, National Funding Rates and non-FE modelling?

Detailed funding guidance not anticipated until March 2008

New funding systems operational from August 2008

Questions and or comments

nick.linford@lewisham.ac.uk

www.lewisham.ac.uk/pf