In October, institutions and other stakeholders were asked for their views on options for significant changes to the way 16-19 education and training is funded. From the wide-ranging responses received (almost 700 in total) the majority agreed with the overarching principles of simplification of the 16-19 funding formula proposed in the consultation document. But many were concerned about the impact of changes to funding on their institution.

This week, as part of a number of announcements on post-16 reforms, the Secretary of State confirmed that for 2013/14 a new fairer, simpler and more transparent funding system will be introduced to support the raising of the participation age and the introduction of study programmes for young people.

I am sure schools, colleges and training providers are still contemplating the detail of the package of announcements, and I’ll say more later about what the Education Funding Agency (EFA) will be doing over the coming months to make sure you are informed and prepared for the changes ahead.

But the fact is that the current system – with wide variations in the funding young people doing similar types of learning attract – was in need of review and reform. The changes to the funding system are designed to make the system fairer and simpler and in particular to support all young people equitably so that they have the best chance of going to higher education, getting good jobs and succeeding in life.

Ministers are establishing a working group to help ensure that these reforms work in the best interests of all young people”

The key points from the funding announcement include:

• Under the new system institutions will attract a standard rate of funding for each student weighted for necessary course costs, retention and with additional funding for those at a disadvantage all adjusted for area costs;
• The reforms will free up institutions to provide more demanding programmes that meet the individual needs of young people currently not well served – especially those on some vocational courses, which are not well-regarded by employers;
• The new system will be significantly simpler than that used now and will remove some of the data and audit systems required to feed the formula;
• It will free up schools, colleges and other providers so that they can deliver innovative and flexible programmes of study, including non-qualification bearing activities such as work experience; and
• By removing success rates from the formula, we are removing perverse incentives and freeing schools and colleges up to put students on courses that will stretch them to their full potential.

In response to the views expressed in the consultation, protections have been put in place so that, for at least three years, no provider will lose any programme funding as a result of these changes. During those three years A-levels will be reviewed, and we will need to review funding for large academic and vocational programmes in light of this and as part of the next spending review.
But what of the more immediate future? What happens next and how can you get involved and find out more?

Ministers are establishing a working group to help ensure that these reforms work in the best interests of all young people, with representatives from across the sector invited to participate and give the views of their colleagues. In addition, the EFA will be holding a series of provider briefings across the country from the autumn onwards to ensure all our customers understand how the new system will work and to answer their outstanding questions.

But we understand that it’s not just about the process, it’s about what this means for your funding in the years ahead. We will therefore be providing you with ‘shadow allocations’ to see what your current (2012/13) funding allocation would have been if calculated on the basis of the new 16-19 funding formula.

The post-16 reforms represent a significant change for us all – but our aim at the EFA is to make the transition as smooth as possible and to work with 16-19 providers to give you as complete a picture as we can about what you can expect in 2013/14 and beyond.

Information about the 16-19 funding formula review
Programmes of Study
Raising the Participation Age
• For any queries about the new 16-19 funding system or the review not answered by information on this site, please email FundingFormulaReview.EFA@education.gsi.gov.uk

Peter Lauener, Chief Executive of the Education Funding Agency