Revealed: The colleges and local authorities allowed to keep £5m for courses that did not take place

Over £5 million in adult education budget funding was paid to 86 colleges and local authorities last year for courses that didn’t take place, according exclusive FE Week analysis of Education and Skills Funding Agency figures out today.

The £5,059,522 windfall was the result of a funding rule in which a three per cent tolerance is applied to grant-funded AEB under-delivery.

Twelve colleges and one LA provider each received more than £100,000 for provision they didn’t deliver over the year as a result of this rule, according to the ESFA’s 2016/17 final funding year values, published this afternoon.

The largest payment went to Birmingham Metropolitan College, which delivered adult education worth £13,798,372 against an allocation of £14,189,878 – meaning it was overpaid by £391,506.

The rule states that “where your delivery of the overall AEB is at least 97 per cent of your funding allocation, we will not make a year-end adjustment to your funding allocation and you will not have to pay back any unspent funds”, according to the ESFA’s 2016/17 AEB funding and performance management rules.

However, it doesn’t apply to independent training providers, who will be subject to a “year-end adjustment” to their funding allocations for any under-delivery and “must pay back any unspent funds”.

At the opposite end of the spectrum, 74 providers over-delivered provision that was not paid for, worth a combined total of £2.6 million.

However, this is set to change: the ESFA recently announced it was “committing to fund 3 per cent over-delivery at the end of the 2018 to 2019 funding year for all providers”, to “ensure providers can deliver adult education budget provision with confidence”.

The funding and performance management rules for 2018/19 have yet to be published, so it’s not yet known if the three per cent tolerance for under-delivery will remain after 2017/18.