The Department for Education has announced it can’t afford to fully fund “unprecedented” requests for in-year growth to cover this year’s rise in student numbers.
Instead, the department said it could only fund two-thirds of what colleges expected based on previously published guidance.
In an update this evening, the DfE said a “very large” increase in 16- to 19-year-olds in colleges this year is “positive” for young people but “significantly above the budget for in-year payments, so we cannot fully fund this growth.
“Because of the size and distribution of this growth in student numbers, it does create an unprecedented amount of in-year growth. We will fund all students through the lagged student number methodology in future allocations as normal. However, the current growth is significantly above the budget available for in-year payments, and so we cannot fully fund this growth.”
Officials use November data returns on student numbers to determine over-delivery against previously agreed allocations for funded student numbers.
For this year, a new step has been added to the way colleges calculate how much in-year growth they can claim called “the affordability factor”. This means once over-delivery has been calculated and any previous under-delivery removed, only two-thirds of the growth award can be claimed.
Institutions will be told their growth payments for this year by the end of March, ahead of payments starting in May
Colleges have been told not to assume these rules will apply to in-year growth for 2025-26 as no decisions have been made.
Raise the rate
Today’s announcement does however confirm a 3.78 per cent funding rate rise for 16- to- 19-year-old students, bringing the top funding rate for study programme students to £5,026.
This increase comes from the £300 million package announced by Chancellor Rachel Reeves in October’s budget.
Around £50 million of that has been committed to “one-off grants” to further education and sixth form colleges to help with pay awards this year from April to July.
The remaining funding has gone towards the rate increase for 2025-26.
Funding details for adult learners, and payments covering next month’s employer national insurance rise, have not yet been released.
The base rate increase applies to each study programme funding band, which is calculated using annual planned hours.
At the top end, for 16 and 17 year olds with 580+ planned hours, the base rate will increase from £4,843 to £5,026. This also applies to high needs students aged 18 and over. For student aged 18 and over who are not high needs, the rate will increase from £4,006 to £4,157.
Additional payments for disadvantaged students and care leavers will be frozen at current rates: £570 for bands 4 and 5 students and £772 for T Level students.
English and maths funding has also not changed.
T Levels uplift removed
A 10 per cent uplift on T Level funding applied for this year has not been applied for next year. DfE said it would “confirm the position” on the uplift “in due course”.
Today’s update confirms that the September 2024 intake of T Level onsite construction will be the last.
Funding for students on the T Levels in the legal services specialisms will be reduced for 2025-26. This is because it was previously “over-funded” and there was an error in previously calculated guided learning hours for the courses. They will attract £10,456 for the two year course rather than £12,060.
Funding for the new T Level in marketing, which begins teaching for the first time in September, has been confirmed at the lowest funding band, £10,456.
English and maths
Previously announced changes to the English and maths condition of funding have been confirmed.
These include the 100 hours over-the-year requirement, asking institutions for their “best efforts” to deliver an extra 35 hours of maths on top of that, and reducing the non-compliance tolerance threshold from 5 per cent in 2025-26.
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