AEB business case outcomes delayed

Providers are waiting to see if they can hang on to underspent AEB funding

Providers are waiting to see if they can hang on to underspent AEB funding

adult education

Colleges will have longer to wait to find out whether their business cases against a controversial adult education budget clawback have been successful.

They had expected to receive the outcomes of the Education and Skills Funding Agency’s review of these cases this coming Monday.

Yet the ESFA has today confirmed there will be a “short delay” in communicating outcomes.

“We recognise the importance of notifying decisions to those providers who submitted business cases as soon as possible,” a spokesperson said.

“We have undertaken a comprehensive review of each case and want to ensure that our decisions are correct, as a result there is a short delay whilst we finalise those outcomes.”

The ESFA said it could not provide a new deadline for the outcomes.

Around 50 colleges submitted business cases, the Association of Colleges has said.

Providers resisted 90 per cent adult education funding clawback

The ESFA attracted a large amount of sector criticism when it announced in March providers would have to use at least 90 per cent of their 2020/21 AEB grant funded allocation or hand back cash up to that threshold.

At that time, officials ruled out allowing colleges to submit business cases.

Providers protested that having to hand back funding would affect cashflow, capital spending and future planning.

The Association of Colleges predicted the threshold put “tens of millions of pounds” in college funding at risk.

Leicester College, which was affected by a drawn-out lockdown in its home city, highlighted how it had been “impacted by the pandemic far more severely than 2019/20,” when the AEB reconciliation threshold was set at 68 per cent.

Following the pressure from the sector, the agency announced in September it would allow colleges which had not spent 90 per cent of their allocation to submit business cases explaining why they should be able to keep the funding. 

A deadline of October 7 was set for submitting business cases.

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3 Comments

  1. Dave Spart

    I wish FE Week would stop using the expression “underspend” in this context. To a very large extent providers will have incurred the same costs in delivering their AEB last year (perhaps even more), but have had fewer learners and compromised outcomes as a result of the pandemic. The funding is therefore ‘under-earned’; if it was underspent there would not be a compelling case for cancelling the clawback.

    And can anyone explain the logic of a 68% threshold in a year that was only partially affected by Covid (and not during the crucial start of the year), but a 90% threshold in a year that was impacted throughout?

    • Amy Ealing

      Just to point out the comment “Same cost in delivering”? But most subcontracts out a large chunk (c20%) and are therefore keeping 100% of 20% rather than their usual 25% top slice – which is a disgrace too!