London is first to warn about AEB underspend for 2019/20

The first signs of yet another adult education budget (AEB) underspend have appeared, after the Greater London Authority revealed delivery is “lower than expected”.

Agenda papers for a board meeting in February shows they are already taking action by moving unused funds to a budget for later in the year.

GLA officials have proposed to mayor Sadiq Khan that they shift £7 million, out of a £190 million AEB for the first eight months, to be made available in the last four months of the academic year.

The Education and Skills Funding Agency has previously used the same “re-profiling” tactic, taking advantage of the academic and financial years being based on different dates, when it was experiencing an underspend in-year.

The GLA’s agenda paper said that where performance is “lower than expected”, they are “working with providers to review performance issues and related actions, and to identify whether allocations or contracts need to be adjusted to reflect the level of AEB delivery”.

They also note that there is a “risk that underspends are recovered by the Secretary of State in circumstances where the Secretary of State considers funds have not sufficiently been committed to be spent”.

FE Week understands AEB underspends for 2019/20 are also being experienced in other devolved areas, as well as in the national budget that is administered by the Education and Skills Funding Agency.

Previous analysis by this newspaper found that more than 400 colleges and training providers between them failed to deliver £73 million of AEB funding in 2016/17. Similar underspends have been felt in other academic years since then.

Brenda Mcleish, chief executive of the Learning Curve Group – a training provider that was unsuccessful in obtaining devolved AEB contracts in a number of areas this year, told FE Week: “We are hearing about the potential of in-year underspend in a number of devolved areas.

“Any non-utilisation of funds would be disappointing given that the combined authorities claimed to have undertaken such extensive procurement exercises when selecting providers who could deliver the profiles allocated to them.”

She said that her provider received a “significant volume of enquiries” from learners wanting to access training in devolved areas but these are people “we are unable to help due to the fact we do not have funding in a number of devolved areas.”

She continued: “To discover that money is not being used when we, and other providers in a similar situation, have this level of interest would be hugely disappointing and letting down those most in need of support.”

Sector leaders have previously claimed the fault of not delivering their allocations lies with “restrictive” rules and low funding rates, rather than providers.

Another issue was added following the introduction of FE loans for learners aged 19 to 23 in 2016/17, which meant that courses that used to be funded through the AEB were no longer included.

Underspend for the 2018/19 year cannot be calculated yet as the final allocations and spending figures are not due for publication by the Department for Education for another month.

A spokesperson for the Mayor of London said: “The GLA has forecast expenditure to deliver the AEB for the 2019/20 academic year and we proactively monitor providers’ performance to ensure funding is allocated as effectively as possible.

“This includes funding potential growth for over-performing AEB procured providers to maximise delivery over the full academic year, which would be agreed in May.”

The spokesperson added that officials will continue to review delivery in line with the performance management approach set out in the GLA’s funding rules.

And the agenda papers for the February meeting said: “Importantly, understanding the delivery spend, identifying any underspends associated with under delivery and proposing options to utilise such funds in a prompt manner will improve the reputation of the mayor in successfully managing the AEB.”