A union has called on college leaders to “guarantee” that the latest FE base rate funding increase will result in a substantial staff pay rise next year.

Just before the Christmas break the Department for Education announced that the national funding rate for full-time students aged 16 and 17 will rise by 8.4 per cent from August 2022.

It means colleges will receive £4,542 instead of £4,188 for each young learner. Most of the increase will pay for 40 additional teaching hours that officials say they now “expect” to be delivered and have promised to “monitor”.

The DfE also announced rises to its high-value course premium; programme weighting factors in five sector subject areas; disadvantage premiums; and enhanced funding rates for T Level students.

The funding boost, part of the extra £1.6 billion the Treasury’s spending review pledged to invest in 16-to-19 education by 2024/25, was revealed a day after the Association of Colleges recommended its members give staff a one per cent pay rise despite demands by unions for a more significant hike.

University and College Union head of further education Andrew Harden said colleges have repeatedly used a lack of government funding as an excuse to hold down staff pay. He told FE Week that this latest funding announcement coupled with 2020/21’s £400 million boost means “there can be no excuses for holding down staff pay.

“The one per cent pay increase offered before Christmas was a kick in the teeth for staff, and employers must guarantee that increases in funding for colleges will result in increases in pay for their staff,” he added.

A recent Institute for Fiscal Studies (IFS) report showed that even after the government’s planned three years of increases in 16-to-18 investment, the funding per student in 2024/25 will still be ten per cent lower than in 2010.

Julian Gravatt, deputy chief executive of the AoC, said the department’s 16-to-18 funding announcement “contains some good news” for college staff and students but warned “we don’t know all the details.

“Funding for FE colleges comes from several budgets and it seems there will be no increases at all to apprenticeship, adult or higher education rates despite rising inflation,” he pointed out.

Gravatt pressed that addressing staff pay is a “priority” for colleges and AoC would “of course want to be able to put forward a more meaningful pay award, and hope to do so”.

However, he added, the “financial outlook for 2022/23 is still extremely challenging and we won’t know until the spring what might be possible for next year”.

While the AoC recommends a pay increase to its members, general FE colleges are independent and make final decision on pay themselves.

The process for staff pay in sixth-form colleges differs. Bill Watkin, the Sixth Form Colleges Association’s chief executive, explained pay awards are nationally negotiated and agreed with trade unions NASUWT and the National Education Union.

He said last year they agreed a 2.4 per cent in-year pay increase for teaching staff.

IFS analysis shows that FE colleges receive around £1,500 per student more than sixth-form colleges.

On the base rate increase, Watkin said: “We are pleased that the government has raised the rate – not to the level it should be, but enough to make a material difference to the education of many students.”

He added that sixth-form colleges will “step up to the challenge” of delivering an extra 40 hours per student next year but warned that in doing so they should not be subject to any “additional bureaucratic demands” from DfE.

The Sixth Form Colleges Association’s Raise the Rate campaign has fought for the FE base rate to go up to £4,760; while the Association of Colleges has campaigned for as much as £5,000.