Colleges win budget protection from 18 funding rate cut

Colleges facing a funding rate cut for their full-time 18-year-old learners will be protected from the controversial move inflicting more than 2 per cent damage to budgets.

Skills Minister Matthew Hancock has written to providers telling them the Department for Education (DfE) would cap losses resulting from the 17.5 per cent cut, due to come into force next academic year.

He said the one-year protection measure would affect more than 450 colleges and schools.

Mr Hancock said: “We will cap any losses resulting from this change to the funding for 18-year-olds at 2 per cent of the institution’s programme funding from the Education Funding Agency.”

He added: “This protection for 2014/15 will give schools and colleges more time to adapt to the change, including for those students who are already on courses and give greater certainty over future funding.”

Croydon College principal Frances Wadsworth, who was expecting to lose around £511,000 from her £26m annual budget, told FE Week: “Even though it’s only protection for a year, it comes as a huge relief.”

Martin Doel, Association of Colleges chief executive, said: “While the mitigation is welcome, and a vindication of our representations on behalf of colleges, it remains the case that 16 to 18-year-olds are funded at a level that is 22 per cent less than 11 to 16-year-olds.

“Despite the mitigation this situation has been made worse by the cuts. In the context of raising the participation age to 18, the time has come to review funding from 11 to 18 to ensure that all young people are given the chance to realise their potential.”

The prospect of a mitigation measure had been raised in an Education Select Committee hearing in December, when Education Secretary Michael Gove told MPS he was willing to “have a look” at pushing the cut, due to be introduced next academic year, back until September 2015.”

While recognising that a 2 per cent cap will alleviate the full extent of the damage in the short term, it does not address the fundamental issue of how hard FE colleges are being hit financially

His comments were followed by publication of an official impact assessment that showed general FE colleges would be among the worst-hit of all institutions — with an average reduction in funding of 3 per cent. For land-based colleges it was 2.5 per cent, for commercial and charitable providers it was 1.5 per cent, and for sixth form colleges it was 1.2 per cent.

But for school sixth forms it was just 0.4 per cent. However, the report did not say how much the funding rate cut was expected to save.

Lynne Sedgmore, 157 Group executive director, said: “We had hoped for more discussion on this issue as it has such far-reaching consequences.

“While recognising that a 2 per cent cap will alleviate the full extent of the damage in the short term, it does not address the fundamental issue of how hard FE colleges are being hit financially.”

Sixth Form Colleges’ Association deputy chief executive James Kewin said: “Clearly some mitigation is better than none, but we still do not believe the cut to funding for 18 year olds should have been made in the first place.
“A 2 per cent cap, as part of what appears to be a one year deal, will offer little more than a crumb of comfort to the institutions affected.

“As the government seems determined to make a further cut to the 16 to 19 budget in the autumn — in what would be the fourth cut in four years — the benefits of this mitigation could potentially be wiped out later in the year anyway.”

——-editors comments——

Cut fight continues
It may just be for one year, but mitigation for the controversial 18-year-old funding cut is welcome nonetheless.
That’s not to say the fight against this unfair cut should be over, though.