Colleges have suffered an overall drop of three per cent in 16-18 year old learners, a new survey has revealed.

The survey, conducted by Lsect, funding consultancy and the publisher of FE Week, also showed that more than 60 per cent of further education (FE) and sixth form colleges are concerned that learners will not return after Christmas.

The statistics, from 88 who responded, are similar to those from a previous Lsect survey compiled in September.

It is also similar to the recruitment survey conducted by the Association of Colleges (AoC), released in October, which showed that 49 per cent of 182 colleges reported falling numbers of 16-19-year-olds compared to last year.

However, it showed a national drop of only 0.1 per cent.

These up-to-date figures, collected as colleges submitted R04 data returns last week, show a target total of 182,914 – but an actual recruitment of 177,228 learners, meaning a three per cent loss overall.

Sixth form colleges performed slightly better than FE colleges, with a performance decrease of one per cent, compared to four per cent.

However, the sample of FE colleges was much larger, with 68 responders and 20 for sixth form colleges.

The survey also revealed 64 per cent of those who replied are either “a little concerned” or have “very big concerns” that 16-18 year-old learners may fail to return to their colleges after Christmas.

A number of reasons have been blamed for the decline in learner numbers, including the loss of the Education Maintenance Allowance.

However, the survey also threw up a different line to the exclusive ‘employer poaching’ story in FE Week last week.

Jon Carr, assistant principal funding and planning at Tameside College, said four learners had been poached by a “private training organisation” after enrolling.

He said: “Somehow they got hold of the details for a learner, persuaded that person to join on their course and three others have gone as well. It was after the first six weeks so it acts negatively towards our success rates. We don’t know if anything was offered, but somehow they managed to persuade the learner and then they may have spoken to the other three.”

He added: “Success rates are the main currency in our performance and how it’s measured. We were clearly very angry.”

The college is yet to report the incident to the AoC, nor to the Skills Funding Agency, but they have spoken to their local authority for guidance.

Teresa Frith, policy manager for the AoC, said: “It’s another example of poor practice that would not appear to be in the interest of learners in the long term.”

Meanwhile, a spokesman for Association of Employment and Learning Providers (AELP) added: “This is a practice that AELP would discourage.”

A spokesperson for the Skills Funding Agency said: “The Agency hasn’t been made aware of any individual cases of learner poaching.

“Should a case be brought to the attention of the Agency by a learner, we will review accordingly.”

The survey also revealed that 42 per cent of the colleges who responded say they suffered some difficulties when they submitted their R04 data return.

UPDATE: The Skills Funding Agency (SFA) has confirmed that R04 data returns were submitted on time.

A spokesperson for the SFA said: “The Data Service would like to thank providers for their hard work and efforts in ensuring that their R04 ILR return was submitted on time.

“This has resulted in a successful close of R04, where we have received data from 1,171 providers totalling 3 million learner records and 8.7 million learning aims records.”

The funding of basic numeracy and literacy is to be completely overhauled following little improvement in adult basic skills during the last decade.

The government will pilot a new funding scheme next year which allocates provision based on the ‘distance’ a learner has ‘travelled’ on a programme, rather than the end qualification.

The pilot, announced in the ‘New Challenges, New Chances: Further Education and Skills System Reform Plan’, will incentivise providers to deliver better skills gains for learners on basic skills courses.

The report states: “Building on Lord Boswell’s report on adult literacy we have undertaken a major review of how provision is delivered to improve the economic and personal returns to this investment.”

The pilot will be introduced despite the Skills Funding Agency’s (SFA) existing plans for a new, simplified funding system for adult skills, which will be ‘dual running’ next year and fully implemented in 2013/14.

The report adds: “Despite considerable efforts over the last 10 years to improve the basic skills of adults, our new national survey shows that 24 per cent of adults (8.1 million people) lack functional numeracy skills and 15 per cent (5.1 million people) lack functional literacy skills.

“This is unacceptable.”

The new funding pilot is one of 15 recommendations set out in the ‘Review of Research and Evaluation on Improving Adult Literacy and Numeracy Skills’, published by BIS but produced by John Vorhaus, Jennifer Litster, Michael Frearson and Stuart Johnson.

The review states: “Inspections and programme evaluations should include attempts to assess whether and how far learners retain skills over time, and how far qualifications are geared towards promoting underpinning literacy and numeracy skills.

“It should be a priority to gather longitudinal evidence on skills retention and loss over time.”

The new funding scheme is a response, in part, to the 2011 Skills for Life Survey, published by BIS, which shows a decrease in the number of adults acquiring basic maths.

Toni Fazaeli, the Chief Executive of the Institute for Learning (IFL), said: “We agree strongly with the government’s focus on numeracy and literacy and its proposals to ensure that proficiency in maths and English is embedded throughout the FE and skills system.”

The 2011 Skills for Life Survey found that 24 per cent of respondents failed to achieve an entry Level 3 or above in numeracy – a three per cent increase in the last eight years.

Joy Mercer, the Director of Education Policy at the Association of Colleges (AoC), said: “One of the problems with the qualifications for adults literacy and numeracy is that they didn’t produce people that could actually enter the workplace with functional literacy and numeracy skills.

“You therefore get teaching to the test, because colleges are measured very definitely on the attainment of qualifications, rather than here’s individual A, what do they really need to become functionally literature.”

The survey also found an increase of 13 per cent in the number of people achieving a Level 2 or above in literacy, with “no significant change” in respondents achieving at least a Level 1.

Carol Taylor, Director for Research and Development at the National Institute of Adult Continuing Education (NIACE), says there are too many adults with “very poor basic skills” learning in a system which “isn’t working for them.”

She said: “It’s alarming that 15 per cent of the adult population are performing at entry level 3 or below in literacy and 24 per cent in numeracy at entry Level 2 or below.

“Put simply, around one in six of the adult population has difficulty with aspects of reading and writing, which means they are seriously disadvantaged as employees, citizens and parents.”

NIACE has recommended that BIS improve the quality of teaching by working more closely with the Department of Work and Pensions (DWP), as well as local authorities, further education colleges and training providers.

“The Treasury has quite rightly shown an interest in the impact of the Government spend and the fact that, despite an enormous and welcome investment in skills for life over the past decade, there are simply far too many people who have not been helped,” Taylor said.

“NIACE suggests that making learner qualifications the all-important target for providers means teachers have been encouraged to teach to the test, thereby ‘plucking only the low hanging fruit’.

Ms Fazaeli added: “We are concerned that too few literacy and numeracy teachers have the specialist subject teaching qualifications they need, and this is borne out by Ofsted’s observation that literacy teaching is better when teachers are properly qualified in the subject.”

Fresh details have been revealed on the awarding of 40,000 cash incentives to smaller businesses to take on apprentices.

Business Secretary Vince Cable announced on November 16 that 20,000 incentives places of £1,500 would be provided to companies with less than 50 employees.

It would be handed to employers who had not engaged in the programme, but were keen to take on a 16 to 24 year old apprentice.

The initial number was then doubled little more than a week later – on November 25 – when Deputy Prime Minister Nick Clegg announced that up to 40,000 incentive places would be offered as part of the £1 billion of funding through the Youth Contract.

However, no further details were released on the mechanism of the payments or when they would be made available for during the 2012/13 financial year.

The Department for Business, Innovation and Skills (BIS), though, has said it expects more details to be announced “soon” by the National Apprenticeship Service (NAS), with a criteria currently being put together.

A spokesperson for BIS said: “Vince Cable announced on November 16 that 20,000 incentive places would be provided for small businesses, not previously engaged in the programme, to offer apprenticeship places for 16-24 year olds.

“As part of the £1 billion of funding provided through the Youth Contract to help young people, it was announced by the Deputy Prime Minister on November 25 that additional funding would be made available to increase the number of incentive places to up to 40,000.

“The incentive scheme will continue to be targeted at small businesses. The NAS are currently developing the precise eligibility criteria.

“The NAS will provide full details on their website shortly.”

However, BIS has also revealed the payments will be balanced against completions and the future employment of the apprentice.

The spokesperson added: “Businesses taking part in the scheme will receive two payments for each apprentice they take on.

“The first payment will be made soon after the apprentice has started their framework. The second payment will be timed to incentive completion and ongoing employment.”

When Mr Cable announced the cash incentives, he also revealed a host of other measures to make it easier for companies to take on apprentices.

He said processes will be simplified to make it quicker to take on apprentices, including streamlining health and safety requirements, and a focus on targeting the programme where apprenticeships deliver greatest value.

Apprenticeship providers, will also be required to offer training in English and maths to the standard of a good GCSE (level 2) for all apprenticeships.

For more on the plans, businesses can contact the NAS on their hotline for employers, which is 0800 150 600.

A survey has revealed a high proportion of senior leaders are concerned about the college finances.

Conducted by Capita’s further and higher education business last month, it found that 87 per cent of 36 principals and vice-principals questioned are concerned about the short to medium-term financial viability of their college.

It was undertaken for the launch of their white paper, The Vice Principal’s Guide to Efficiency: How Technology Can Help Cut Costs for FE Colleges, which reveals where up to £2 million of savings can be made in further education (FE) colleges.

The white paper looks at the role of using management information and data to improve efficiency in various areas.

Detailed areas where colleges might be able to make savings or increase income, include £1 million saved from improved student management, £750,000 saved from using staff and facilities to their maximum efficiency, £500,000 gained by maximising income and £25,000 saved from streamlining management and administration.

There are also potential savings to be made from shared services and introducing new business models.

The survey revealed that colleges already recognise that savings can be made by making better use of staff and facilities, with more than half  (52 per cent) believing this has the greatest potential for reducing costs in their organisation.

This was followed by administrative processes (23 per cent)and new business models (16 per cent) such as mergers and shared services. In fact, 61 per cent of those questioned were already actively investigating the possibility of shared services.

George Layfield, UK sales manager of the firm, said: “Each student drop-out can represent between £5,000 and £10,000 of lost funding and recruitment costs yet, despite this, some rates remain as high as 20 per cent.”

John O’Callaghan, assistant director of information services at Hackney Community College, added: “There can be practical hurdles to overcome for leadership teams to make the most of the data collected on the management of their college, and it can be a challenge to foster a positive culture of data ownership.

“However, it’s worth persevering as data provides the only way to get true picture of how efficiently your college is running and if improvements can be made.”

When it comes to quantifying the reductions colleges need to make for 2012/13, the survey revealed that 61 per cent estimate they will need make savings of up to 10 per cent off overall college budget, 19 per cent believe it will be between 10-20 per cent and 13 per cent will be looking to make 20 to 40 per cent savings.

Mr Layfield added: “The survey reflects colleges’ on-going concerns over budgets and the need to make savings while protecting the student experience.

“The white paper sets out how relatively straightforward strategic changes such as increasing class size and having easily accessible, accurate date can have a huge impact on the bottom line without having a negative impact on learning.”