Changing the funding formula for 16-19 learners

Following the closure of the 16-19 funding formula review consultation at the start of the month, FE Week asked Paul Warner, director of employment and skils at the AELP, and Lynne Sedgmore, executive director of the 157 Group, for their thoughts on simplification, funding rates and methodologies.

There is much to welcome in the proposals to change the way in which programmes for 16-19 year olds are funded. They clearly build on the Wolf Review which we have also welcomed and put learners and learning rather than the accumulation of qualifications centre stage.

They are consistent with the drive to give more freedom to institutions to decide what is best for their learners; and they are based on a clear set of principles which most people would endorse. We in the 157 Group are keen to work with the new Education Funding Agency to make them a success.

We are particularly pleased at the proposal that funding should follow learners, not qualifications. One of the clear weaknesses of the current system is that institutions are forced to design students’ programmes around the accumulation of qualifications in order to balance the books.

Now colleges and other providers will be trusted to deliver a mix of activities some of which will lead to qualifications and some will not. Although revolutionary in FE it is what happens in virtually every other phase of education.

It looks clear that funding for adults will develop in a quite different direction”

In one important respect however the funding proposals risk diverging from the Wolf agenda. One of the many unfortunate consequences of a qualification driven system is that students who find learning easy attract more funding than those who find it difficult; they can take more qualifications and earn their institution more money.

A real attraction of the Wolf Review and the funding reforms that follow is the prospect of an end to a system that systematically directs more funding towards level 3 students compared with those studying at levels 1 and 2 and selective institutions at the expense of the more inclusive. Funding learners rather than qualifications should mean just that – a standard sum per learner.

To the extent that the proposals will simplify the funding system that is also welcome, though it is far from their most important aspect. Unlike some previous ‘simplifications’ which actually succeeded in making the system considerably more complex, the new system does promise to be simpler, though in ways that are not all that important to colleges. The reduction in the number of programme weights for example makes the system look a little more simple on paper, but will do little to cut bureaucracy.

There is also a risk that simplification will lead to inequity. The 157 group is increasingly concerned about STEM subjects which it is generally accepted are more expensive to teach. The proposals to reduce the number of programme weights will in effect reduce the differential in funding between STEM subjects and others making them less attractive. Taken together with BIS proposals that mean that over 24s will have to take out larger loans if they study a STEM subject there is a risk that moves to increase the focus on STEM will be put in reverse.

It is of course a weakness of the proposals that they only affect part of college provision, and it looks clear that funding for adults will develop in a quite different direction. This is particularly problematic for the 19-24 age group many of whom are following a similar path to 16-18s but a couple of years later.

If we must have two departments it would be good if they could agree on a consistent set of funding principles and the ones set out by DfE/YPLA represent a good starting point. They emphasise the importance of stability in institutional funding; the need for funding to reflect necessary costs, and for the system to avoid introducing perverse incentives. Surely we can all sign up to that.

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