Agency freezes rates as drop in 18 funding hits

The Education Funding Agency has announced it is freezing rates for 2014/15, prompting criticism that the sector is facing a “real terms” cut.

The agency said it would continue paying an unweighted full-time rate of £4,000 for 16 and 17-year-olds while implementation of a 17.5 per cent rate cut for 18-year-olds will see the age group’s funding drop to £3,300.
It also said the part-time rate for 16, 17 and 18-year-olds would go untouched.

Stewart Segal, chief executive of the Association of Employment and Learning Providers, said: “The freezing of the funding rate means in real terms providers are being asked to deliver more for less.”

The deputy chief executive of the Sixth Form Colleges Association James Kewin said the national rate for 16 and 17-year-olds was “still well below what colleges need to ensure all students can successfully progress”.

“Rather than conjuring up a national rate and telling colleges to deliver what they can for it, funding should be based on an assessment of what it actually costs to provide a rounded and relevant education,” he said.
He described the 18-year-old rate cut as “ill-informed and pernicious” and likely to affect “educationally vulnerable” learners.

The agency confirmed allocations, due to be published this month, would incorporate a 2 per cent cap limiting the effect of the 18-year-old cut on providers’ total budgets.

It further said it would fund places for 1.54m young people in 2014/15 with a total budget of £7.18m. “These volumes will keep us on track to provide a place for all young people who want to participate and to enable 16 year-olds to meet their new duty to participate in education or training,” it said.

However, the Association of Colleges (AoC) also argued this amounted to a real terms cut. Julian Gravatt (pictured), AoC assistant chief executive, said: “It will mean colleges, who’ve coped with year-on-year cuts since 2010, will need to do more with even less money.”

He added he was “relieved” by the 2 per cent cap, but said the measure “doesn’t address the underlying financial challenges facing colleges and sixth form colleges and will only cushion the blow for a year”.
“Funding for 16 to 18 cannot sustain a further cut without quality suffering and the financial health of colleges being irreparably damaged,” warned Mr Gravatt.

Lynne Sedgmore, executive director of the 157 Group, said: “It is disappointing that the government has chosen not to review its decision. While the one-year mitigation is of some relief, we continue to make the case very strongly that this cut will hit those who most need education the hardest, and to push for a review.”