The Education and Skills Funding Agency has today revealed a new in-year growth funding calculation for 16 to 18-year-olds to support “modest growth”.

The news comes after mounting pressure for greater support for an estimated 20,000 students who are currently going unfunded in colleges due to FE’s lagged funding model and a surge in young people choosing to continue education rather than enter work amid Covid-19.

In-year growth is usually only awarded to those colleges that have “significantly” oversubscribed but the ESFA said today that colleges with “more modest levels of over-delivery” will “also receive some growth funds” this year and has published a spreadsheet for institutions to use.

The ESFA explained that this process will be “purely data driven” and they will not accept business cases like in previous years.

The calculation includes lower and upper thresholds, depending on the number of students originally allocated prior to the year starting. It also takes into account any under-delivery in the previous year.

Most sixth form colleges and large FE colleges have been set the highest lower threshold of 100 students, but with a minimum growth increase of at least 10. This means if they over-delivered by between 100 and 109 they would not receive extra funding but if they over-delivered by 110 they would receive extra funding.

For colleges with a small number of 16 to 18-year-olds it is possible under the model for them to have recruited just 35 more students than allocated and still receive in-year growth funding. For example, with the lowest lower threshold minimum for colleges set at 25 and a minimum growth set by the ESFA as 10, a college could be funded for 10 extra students if they had an allocation of 300 and actually recruited 335.

For specialist post-16 institutions the lowest lower threshold minimum has been set at just five, with no minimum growth value. So a specialist post-16 institution would be funded for one extra student if they had an allocation of 50 and actually recruited 56.

Colleges with larger allocations and more significant growth increases would still only be funded this year for up to half the value of the growth, as has been the case in previous years.

The ESFA says growth payments will start to be received from March 2021 “in most cases” and will be profiled across the remainder of the current academic year.

James Kewin, the deputy chief executive of the Sixth Form Colleges Association, said this announcement was a “welcome move”.

“The threshold for securing in-year growth funding has always been very high, and as a result, very few institutions have been able to access it,” he told FE Week.

“Reducing the threshold will make this funding available to more colleges and relieve some of the short term financial pressure that can accompany growth. It is particularly welcome this year given the sharp increase in student numbers experienced by many institutions.”

Kewin added that he would like to see similar arrangements put in place for future years, particularly as the demographic increase in the number of 16 to 18 year olds is set to continue in many areas until the end of the decade.

Today’s announcement did warn that the agency has not yet made a decision on in-year growth for 2021/2022 and colleges “should not assume that the 2020/2021 rules above will be continued next year”.

This process does not apply to independent learning providers for whom there is a separate reconciliation process.