Around 20,000 “unfunded” 16 to 18-year-old students are studying in colleges this year following a surge in enrolments due to Covid-19, according to the Association of Colleges.

The membership body said that the number – caused by the Education and Skills Funding Agency basing college funding on lagged learner numbers – equates to around £120 million.

It comes a week after the Institute for Fiscal Studies warned that because of FE’s lagged funding system, exceptional rises in student numbers could generate a real-terms fall in funding per student this year despite FE’s £400 million boost for 2020/21.

An AoC members’ survey released today found that nearly two-thirds (62 per cent) of colleges have seen an increase in 16 to 18 enrolments while costs have soared to makes campuses Covid-secure.

The association estimates that most (£225 million) this year’s £400 million funding boost has been absorbed by the additional costs that include personal protective equipment, cleaning, technology, transport, and extra staff.

To make up for the unfunded learners and Covid-19 costs, the AoC has called on the government to reallocate unused apprenticeship funding to colleges.

The AoC says that apprenticeship starts have fallen 60 per cent in comparison to the levels seen during 2019 and for 16 to 18-year-olds, the drop is even greater, at 79 per cent.

The association claims that with many workplaces shut or unable to take on apprentices, the reduced numbers are likely to remain in 2021 and 2022.

However, the AoC could not say how much it expects the apprenticeships budget to be underspent by, nor how they knew that there would be an underspend considering the carry over funding that has been building since the launch of the levy in 2017.

The government is also making a big push to increase apprenticeship starts post-pandemic, including new employer cash incentives that can see businesses receive £3,000 for taking on an apprentices aged 16 to 18 from August 2020 until 31 January 2021.

The DfE was approached for comment but did not say at the time of going to press whether it projects an apprenticeship underspend itself.

But, as FE Week revealed in July, £330 million of the 2019-20 apprenticeships budget was unspent and handed back to the Treasury.

In 2017-18 – the first year of the levy – around £300 million was surrendered. The DfE previously said it did not surrender an apprenticeships underspend in 2018-19.

Making the case for reallocating unused apprenticeship funding to colleges, AoC chief executive David Hughes said: “Sadly, many young people have not been able to secure the apprenticeship they want, so have turned to their local college to provide the training and education they know will help them when the jobs market picks up.

“Colleges have welcomed them, designed study programmes to meet their specific needs and want to help them get ready for the future. Unfortunately, though, the funding system which works well in a stable world, is not designed for such big in-year growth. In many cases it means that colleges are supporting hundreds of unfunded learners at a time when Covid has already increased their costs and put pressure on their budgets.”

He continued: “At no extra cost to Treasury, a redirection of unusable apprenticeship funds to colleges could help these young people pave a way to a promising future. We want this to be for the next two years, giving time for the labour market to pick up again and businesses to recover from the downturn. By which point thousands of young people will be work-ready and have the skills employers will need to get back on their feet.”

While the ESFA’s 16 to 19 funding system does have mechanisms to allow colleges to apply for in-year growth if they have a spike in student numbers, the AoC has previously pointed out that this is based on affordability.