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YPLA 16-18 Funding Statement
On the 20th December the YPLA finally published their equivalent of the SFAs Investment Strategy, which they called their ‘Funding Statement’. To download the document click on this link: http://tinyurl.com/388vx8d

I’ve picked out a few highlights in this update, the most significant of which is the unexpected 74% rate reduction to entitlement funding.

Funding statement numbers
At first glance the YPLA funding statement looks relatively positive for FE, as the funding rises (1.9%) by more than the learner numbers (0.7%). School Sixth Forms are facing a lower rise (0.5%) for more new learners (1.1%) as a result of moving downwards towards parity of funding with colleges, and we now know that Apprenticeships will suffer a 2% funding rate reduction each year.

However, in reality the budget increase for FE only partly pays for the costs associated with 16-18 year-olds previously on short courses that are now enrolling on longer and thus more expensive ones. As paragraph 16 states: “it is expected that part-time programmes will grow in size as Foundation Learning is implemented and also that there will be a continued shift from part-time to full-time programmes.”

Cost pressures and £643m(?) cuts to entitlement
The YPLA have chosen to reduce the funding for entitlement in order to find the savings necessary to fund more full-time programmes. Entitlement was introduced in the year 2000, and funds enrichment activities and tutorials. The funding statement confirms that this will be reduced by 74% from 114 funded hours (SLN GLH) to just 30.

I also understand that it is likely the annual per learner 1.75 SLN cap will be reduced to 1.56 SLN (regardless of whether entitlement is claimed), and the Skills Funding Agency are in discussion with the YPLA about ‘funding alignment’ (so also applying the same reduced cap)

Unfortunately the YPLA funding statement does not indicate the savings that this 74% rate reduction will create, although using the 2010/11 allocations spreadsheet it is possible to make an educated estimate. Estimating the impact is complicated by the fact that some providers will already have a reduced SLN per learner ratio, or deliver provision above the current 1.75 cap and some 19 year-olds on entitlement are funded by the Skills Funding Agency at YPLA rates. However, the table below summarises my estimate, which excludes providers with an average lower than £3000 per learner and assumes between 80-90% of learners will be claiming entitlement. I conclude that if implemented without transitional protection it would save approximately £611 per learner claiming entitlement, £643m in total, and reduce budgets for schools and colleges by an average of 11.4%.

You can download my workings (blue columns applied to the 2010/11 allocations spreadsheet here) and alter the percentage claiming entitlement to see impact on individual providers here: http://tinyurl.com/38d623k

The reduction to 30 hours is much greater than most (anyone?) had been expecting. It also seems an odd number, unless the YPLA think schools and colleges will move to 30 weeks a year in order to save costs. A more obvious SLN GLH rate would have been 36 (the rate at which Key Skills are funded), representing one hour per week for twelve weeks per term.

Value of enrichment activities and tutorials to learnersIt is worth reading a research report published in July 2010 from RCU (funded by LSIS) called “The Hidden Advantage: Delivering Excellence in Tutorial Support”: http://tinyurl.com/23hc3a8

This includes statements such as:

Para 4.4: “A key concern voiced by some senior college staff was the risk to the tutorial system if there was any reduction in the paid glh allocated to the entitlement as it was felt that this would have a major impact on students.”

Para 4.13: "In the eyes of the College, tutorials are the glue which binds the learner journey as a whole."

Para 5.6: "A key question for the future will be can colleges produce the same level of quality of outcomes for students with lower cost models?"

Impact on Ofsted inspection framework and grades?
The RCU research points out in paragraph 4.3: “The guidance for Osfted inspectors, the Handbook for Inspectors, requires inspectors to take account of enrichment activities, while tutorials get a specific mention in relation to the level of young people’s knowledge around equality and diversity.” Therefore, assuming providers cut back on these activities by 75% will Ofsted also be expecting less? Will it be fair to compare providers before and after this policy unless the inspection framework recognises these cuts? It will be interesting to see if this policy change to entitlement is discussed with Ofsted at their Select Committee hearing on the 12th of January.

Enrichment funding no longer ‘ring-fenced’
The Foreword to the RCU paper says that “For many years we have scrutinised teaching delivery to increase class sizes, reduce course hours and maximise teacher contact to ensure the money goes further without compromising quality. But it is rare to find colleges viewing their heavy investment in personal tutorial work in the same light, despite the fact that ‘enrichment’, for want of a better name, is part of the former LSC’s funding tariff.” And paragraph 5.1 is particularly interesting as it says "One major concern to colleges would be how to maintain tutorials and enrichment activities if this funding was no longer ring-fenced".

This is interesting as in contrast the YPLA specifically points out they are moving away from ring-fencing so “schools and colleges will have the freedom to employ the strategies that they know will support their students to increase their attainment”.

These freedom arguments are also used for scrapping EMA policy, as well as in other areas of Government cuts (such as Local Authority budgets). Unfortunately, the investment in freedom (£150m ~ see below) is much less than the ring-fenced cut.

Increasing by £150m the funding for the disadvantaged
The funding statement says it will use some of the entitlement savings “will be redirected using the disadvantage uplift [IMD 2007] and the Additional Learning Support elements in the funding formula.”

Transitional protection
The funding statement says they will “limit the reduction in the average funding per learner in 2011/12 to a maximum of 3% per young person in learning" and that it will continue in some form until 2014.

SLN per learner ratio ceiling
Providers (based on type) who are in the top 20% of SLN per learner ratios “will be reduced half way to the 80th percentile.” Based on 2010/11 SLN per learner ratios the AoC estimate the ceiling and those that will be affected as follows:

Sixth Form Colleges
1.5700 – will potentially affect 19 SFCs

Agricultural and Horticultural Colleges
1.4017 – will potentially affect 4 AHCs

Further Education Colleges
1.3599 – will potentially affect 46 FECs

It is likely that the ceiling will be applied after the 84 SLN GLH (0.1866r) to entitlement, so very few may be affected.

Allocation methodology
The ‘lagged learner number’ approach will be used, which basically means that learner numbers will come from: (2009/10 F01 divided by 2009/10 F05) x 2010/11 LR01
The SLN ratio and provider factor will come from 2009/10 (with the exception of the success factor, which will be based on success rates 2008/09), and reduced for the impact of the 75% cut to entitlement funding. The final part of the allocation formula is the national funding rate, which will not be announced until March. Given the cuts to the SLN ratio it is possible that this could go up (e.g. for colleges to join schools on £3,007 per SLN) yet many schools and colleges would still face the maximum 3% cut to the funding rate per learner (after transitional protection).

YPLA and SFA Investment Strategy updates from Lsect – places available
I held my first briefing on this document at Lewisham College last week, which went very well and you can read comments here: http://www.lsect.co.uk/comments.asp There are still places for this event in Solihull on the 18th Jan and I have just started taking bookings for a return visit to Lewisham College on the 25th of Jan. Both can bee booked at www.lsect.com

Have a great break
So, it just leaves me to wish you a great break, and assuming you celebrate it, Merry Christmas. See you in 2011.

Kind regards,