Colleges will see an 8.4 per cent increase in the national base rate for full time students aged 16 and 17 from August 2022, the government has announced today.
The rate will shoot up from £4,188 to £4,542. Most of the increase will pay for 40 additional teaching hours that officials have promised to monitor.
The Sixth Form Colleges Association said the rate has not been risen “to the level it should be” but is “enough to make a material difference to the education of many students”.
And the Association of Colleges said it is a “good start in putting back the money lost in cuts and absorbed by inflation over the last decade”.
The funding boost forms part of the extra £1.6 billion that the Treasury pledged to invest in 16 to 19 education by 2024-25, as part of October’s spending review. Details of how £615 million of that funding will be used next year have been published today.
In addition to the base rate rise, the Department for Education has announced a 50 per cent increase in its “high value course premium”, which will move from £400 to £600.
Programme weighting factors in five sector subject areas – medicine and dentistry; nursing; transportation operations and maintenance; building and construction; and urban, rural and regional planning – will also rise by 10 percentage points.
Disadvantage premiums will go up 5 per cent.
The enhanced funding rates for T Level students, who study between at least 1,180 and 1,730 hours over the two years of their course, will continue.
The DfE explained that it expects all T Levels and students funded in “band 5” – who receive at least 580 teaching hours – to “receive an additional 40 hours and we will monitor this”.
“If a provider already delivers more hours to the students than the new minimum required for their funding band, we still expect them to proportionately increase hours for students in future years to provide them with this additional time in education,” the guidance adds.
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.
Following today’s announcement, James Kewin, deputy chief executive of the Sixth Form Colleges Association, said the “priority now” is to ensure the implementation of the 40 extra hours is as “light touch as possible, with monitoring and bureaucracy kept to an absolute minimum”.
“But overall, this is positive way to end the year,” he added.
Association of Colleges chief executive David Hughes said that after a “decade of neglect”, this announcement “feels like a significant turning point and shows a government which is starting to recognise the need to invest in colleges, in post-16 education and training”.
However, he warned that the funding increases “come at a time when inflation is rising, particularly costs like energy”.
Hughes also pointed out that a recent Institute for Fiscal Studies report showed that even after the planned three years of increases in 16 to 18 investment, the funding per student in 2024/25 will still be 10 per cent lower than in 2010.
The funding boost comes a day after the AoC recommended its members give staff a 1 per cent pay rise despite demands by unions for a more significant hike.
But Hughes did say that a “more meaningful” pay award might be possible next year.