The Association for Employment and Learning Providers has secured access to extra funding for independent providers whose allocations have been drastically cut.

The association said it had “intense discussions” with the Education Funding Agency (EFA) after dozens of worried members made contact when their allocations were reduced between 20 and 30 per cent. The cuts followed a change in the funding mechanism.

The Department for Education (DfE) has now agreed to provide extra money for providers who had more learners than predicted this year.

Paul Warner, the association’s director of employment and skills (pictured right), said: “The latest commitments from the EFA to reward providers for strong performance are a real step forward from where we were a month ago.”

Previously, funding calculations were made on a per qualification basis, using providers’ predictions of how many students they would recruit. Under the new mechanism, they will be worked out on a per student basis, using the previous year’s intake.

The association estimated that of the independent providers who got in touch, around two-thirds experienced average cuts of 20 to 30 per cent. About a third were not adversely affected or got a modest rise.

In a letter to Graham Hoyle, the association’s chief executive, the funding agency’s national director for children and young people, Peter Mucklow, said it was predicted that this measure would reduce under-delivery “significantly”.

A DfE spokesperson said: “Our reforms will mean that the amount of funding a provider receives will be based on the number of students they’ve actually recruited in previous years, rather than over-optimistic projections.

“We are also giving more funding to private sector providers and charities who recruit more students than planned so that they can meet the needs of all young people.”

The association’s Countdown newsletter reported that the amount put aside to fund potential growth was more than was needed for the whole of last year, meaning that “whilst this is, as ever, subject to affordability . . . high-performing providers can have a degree of confidence that over-performance will be funded”.

It added that it was hoped the new funding formula would also help to prevent clawbacks at the end of the year, instead freeing up the funding of over-delivery as the year progressed.

The DfE also said that the former funding system had “acted as a perverse incentive for schools to enter students for easier qualifications” and that funding providers per student “will free them up to deliver demanding and innovative courses”.

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