FE base rate to increase from August 2020 for first time since 2013 to £4,188

Colleges will see a 4.7 per cent increase in the unweighted base rate for full time students aged 16 and 17 as part of the chancellor’s £400 million boost to FE, it has been revealed.

After having been introduced at £4,000 per year, per student since 2013, and £3,300 for 18-year-olds since 2014,, the Treasury has today told FE Week the rate will rise to £4,188 from August next year.

The £400 million funding boost will will come into effect in 2020/21 and cover the 257 colleges in England, as well as other FE providers delivering classroom courses like school sixth forms and independent training providers.

Despite the increase, this new base rate is likely to disappoint sector bodies which have campaigned for much larger rises.

The Sixth Form Colleges Association’s Raise the Rate campaign has fought for the rate to go up to £4,760; while the Association of Colleges has campaigned for as much as £5,000.

Association of Colleges gives cautious welcome to chancellor’s FE funding boost

“Meaningful” but not enough to stabilise FE for the future: that is the Association of Colleges’ response to chancellor Sajid Javid’s announcement of £400 million extra investment for colleges this morning.

The association’s chief executive David Hughes said he was “delighted” the government had started to listen to college leaders, MPs, businesses, students and stakeholders.

But, he added: “It’s not enough to reverse the decade of cuts, nor to properly stabilise the sector for the future, but it is a good start.

“Colleges have been overlooked and underfunded for far too long. Today’s announcement of an additional £400 million marks the first meaningful investment in further education for 16-to-19-year-olds for more than ten years. 

“The announcement today will start to invest more in our young people with a long overdue increase in the base funding rate for 16 and 17-year-olds. 

“This will help support the world-class education and training which colleges provide to help our young people to succeed.

“We believe that an announcement about funding to cover higher Teacher’s Pension Scheme costs will come separately and look forward to seeing the detail of that. 

“Recent changes to pensions means colleges are locked into schemes which take a rising share of their budgets with no additional support in funding currently.”

It was announced last year that the amount colleges and other public-funded FE training providers must contribute to staff pensions was set to rise from the current rate of 16.48 per cent to 23.6 per cent – an extra £142 million a year – from September 2019.

However, the DfE announced in April it would cover the cost of the increase – but not how long it would cover it for.

Hughes continued: “Both the chancellor and the prime minister have spoken regularly about the importance of our colleges, and the need to properly invest in them and today they have started to honour that commitment. 

“However adult education was notably absent, with the number of adults in further education almost halving in the last decade, funding is urgently needed to boost opportunities to retrain and tackle skills shortages.

“I am optimistic more investment will follow next year when the spending review will be able to set out a longer term settlement to support thriving and vibrant colleges for the long term. 

“We will continue to work with government, and campaign with partners to make sure that colleges continue to be a serious political, economic and social priority. 

“That means long-term, sustainable funding, and a robust lifelong learning system.

“Schools received a three-year commitment that allows them the chance to plan and deliver – we’ll be pushing government to do the same for colleges in next year’s spending review.”

The chief executive of the Sixth Form Colleges Association, Bill Watkin, called the announcement “good news”, as “sixth form education has been starved of resources over the past decade and today’s announcement provides a much needed boost to the 1.1 million 16 to 18 year-olds in colleges and schools across England.

“Around half of this investment will be used to Raise the Rate – the government has obviously listened to the coalition of organisations and MPs behind the campaign to increase the base rate for sixth formers – and we regard this as a step in the right direction.

“We need to see more detail on all of today’s announcements, but it is clear that this is the first meaningful investment in mainstream sixth form education for a decade”.

The UCU has also welcomed the increase, after what general secretary Jo Grady called “tireless campaigning by trade unions and the further education sector”; the union said colleges’ first priority for the money should be to close the £7,000 pay gap between school and college teachers.

Not everyone is on board with the chancellor’s announcement though: Lawrence Barton, managing director of independent training provider GB Training said: “FE funding in England and Wales is so skewed in colleges favour — to the detriment of independent providers — that they’ve been overcome by complacency. 

“Only by encouraging effective competition and weaning colleges off guaranteed funding grants will the government get a handle on the financial mismanagement plaguing our country’s colleges and driving up teaching standards.”

Does the FE funding boost mean colleges can afford to increase wages?

After mounting pressure (from all quarters) to invest in further education, the new chancellor today announced an extra £400 million for further education in the next financial year. Nick Linford crunches the numbers to see just how big a deal this is, starting with the rise in the base rate.

The Treasury took the lead in announcing this morning that for 2020/21 there would be an additional £190 million to increase the funding base rate. The Department for Education then told FE Week that this meant the £4,000 rate would increase to £4,188, which is a 4.7 per cent increase – a first since the base rate was introduced as part of a new per learner funding methodology in 2013.

  1. The £190 million (financial year) is likely to be worth £250 million for the 2020/21 academic year

The £190 million “covers the financial year 2020-21” says the Treasury, which runs from 1 April 2020 until the 31 March 2021. However, the rate change is expected to apply to the 2020/21 academic year, which runs from 1 August 2020 until the July 2021. So, the £190 million is likely to run from August 2020 (start of academic year) until 31 March 2021 (end of financial year), which is 8 months (67 per cent) of a full academic year. If the £190 million were extended for a further 4 months (an extra 33 per cent), it would be worth around £250 million.

  1. Possible all funding bands increased by 4.7 per cent, but we may not know until December

The Department for Education refused to comment on whether all the funding rates, such as the £3,300 rate for full time 18 year-olds would also increase by 4.7 per cent. It is likely the ESFA is waiting to see what recruitment patterns look like this academic year and as is the norm, confirm the funding bands in December prior to setting allocations. However, working on the basis that the academic year cost is £250 million (see above) then this seems possible. See analysis below:

The ESFA publish 16-19 allocations, which includes a column for ‘Total Programme Funding’. The funding formula for programme funding is based on multiplications, so an increase of 4.7 per cent to the unweighted base rate equates to a 4.7 per cent increase to the ‘Total Programme Funding’.

The allocations for 2018/19 are as follows and I’ve added 4.7 per cent.

So as you can see, increasing programme funding by 4.7 per cent would cost close to £250 million, which is what I would expect based on the £190 million announcement to represent the first eight month of the 2020/21 academic year.

  1. FE colleges could benefit to the tune of £300 million in 2020/21

Based on the figures above, FE colleges would receive nearly half of the extra funding for the base rate increase. However, it is well worth noting that the Treasury announcement included “£120 million to help deliver expensive but crucial subjects such as engineering” along with £35 million more to support students at level 3 who failed their English and maths. Given the types of courses and student profile at FE colleges, I would expect them to receive nearly all of this £155 million. Perhaps the most interesting thing about the total package of £400 million is that this £155 million (nearly half) is clearly targeted to support FE colleges rather than sixth form schools or sixth form colleges. And if we assume this extra £155 million is for the financial year and written into the funding formula, then it would be worth just over £200 million for the academic year. After taking off a £10 million estimate for a small number other institutions benefiting and including the 4.7 per cent base rate rise to all rates, this makes for around £300 million extra for FE colleges.

  1. Average FE college could see 12 per cent more 16-19 funding but just 4.5% more income overall

As the ESFA figures above show, FE colleges are allocated around £2.4bn each year for 16-19 year-olds. So £300 million represents an increase of approximately 12 percent – not insignificant at all. We’ve yet to see the detail on how the £120 million for “expensive but crucial subjects” will be determined – presumably via the programme weighting within the funding formula – but obviously this will vary the percentage increase for colleges depending on their course mix. Also, those colleges delivering T Levels are likely to see their budgets swell – although this will no doubt come with an increased cost for more teaching and initial development.

So an average increase of 12 percent does seem significant, but remember that 16-19 funding is not the only income stream for colleges.

The ESFA publish a spreadsheet with the accounts for FE colleges, most recently for 2017/18, which includes a column for “Total income”, which comes to nearly £6.7bn, or £6,679,218,000 to be exact. So 16-19 funding for FE colleges only represents around a third of their total income.

If FE college income was increased by £300 million to nearly £7bn, the 12 percent rise for 16-19 income falls to a 4.5 percent rise for total income.

And again, depending on the mix and balance of the learners and courses at the FE College, their increase could be more or less than the 4.5 per cent average.

  1. Does this mean colleges can afford to award pay rises?

If total income does rise by 4.5 per cent then possibly. I think a college that hasn’t awarded a pay-rise for many years will struggle to justify not at least considering it now, based on the increases to the base rate and programme weightings. However, firstly, it is worth remembering the increases only kick in from August 1, 2020 (nearly a year from now). Secondly, there are rising expenditure pressures, such as inflation and pensions along with other variables (e.g. utilities, bank repayments and higher inflation in future) which I am sure will make finance directors question whether a pay rise right now would be affordable in the longer term.

Colleges will still need to focus on the basics, like keeping the classrooms full, to pay the bills.

  1. Is the base rate rise enough?

It is important to remember that the 4.7 percent extra on the base rate comes after 7 years of no increase – so it really represents only a year or two of rising costs.

To substantially make a difference to the ability of colleges to pay staff more and even return to teaching at least 36 weeks per year for more than 3 days per week, then the base rate for 2021/22 really needs to be much closer to £5,000 – as per the lobbying from both the Association of Colleges and the Sixth Form Colleges association.

Colleges receive £400m boost from chancellor Sajid Javid

Colleges are to receive a £400m boost from the chancellor, it has been announced.

Sajid Javid today revealed the increase for 16-19-year-old students, which he calls “the biggest increase for a decade”.

This includes £190 million to increase the base rate of funding for 16-19-year-olds; however the government has not revealed what the new base rate will be.

There is also £120 million to help deliver “expensive but crucial” subjects such as engineering; £35 million extra for students resitting GCSE maths and English who are on level 3 courses; an additional £25 million to deliver T-levels; and £10 million for the advanced maths premium, which adds £600 to college budgets for every additional student who takes on A-level and AS- level maths.

There will also be £20 million to help the sector recruit and retain teachers and leaders, and provide more support for the teaching of T Levels.

Javid said: “Further education, like all our public services, is a lifeline of opportunity for our young people.

“We’ll make a strong statement in backing it at this week’s Spending Round and I’ll continue to look at what more we can do to help, just as my FE college opened my horizons and set me on my way.

This funding will come into effect in 2020/21 and cover the 257 colleges in England, as well as other FE providers like school sixth forms.

Learners at South Gloucestershire and Stroud College, which Javid himself attended when it was known as Filton Technical College, met with the Bromsgrove MP yesterday (pictured top).

Javid wrote in The Guardian this morning: “College helped make me who I am today, the first FE chancellor of the exchequer.”

FE colleges are more important than ever, he added, as young people enter working life while technology revolutionises industry, and emerging economies change the global economy.

Education secretary Gavin Williamson, who attended Scarborough Sixth Form College, said: “As former FE students, the chancellor and I both know first-hand how important the further education sector is so I’m really pleased that today that government is giving our sixth forms and colleges a major funding boost – the single biggest annual uplift since 2010.

“This investment will make sure we can continue to develop world-class technical and vocational education to rival countries on the continent so we have a highly skilled and productive workforce for the future.”

The base rate of funding for all 16-18 students has been frozen at £4,000 per student, per year since 2013; while the rate for 18-year-olds was reduced to £3,300 in 2014.

FE organisations have long campaigned for the government to increase base rate funding for colleges, with the most famous campaigns being the Sixth Form Colleges Association’s Raise the Rate campaign and the Association of Colleges’ #LoveOurColleges campaign.

Ofsted watch: ‘Reasonable’ week for many new providers

Ofsted has reported a number of new apprenticeship providers have made ‘reasonable progress’ in early monitoring visits, according to reports published this week.

The one independent provider that stands out, though, is British Printing Industries Federation, which has climbed from a grade three to a grade two in its latest inspection.

Inspectors found there that leaders, managers and staff have made “significant improvements” to the apprenticeship programme, and “strong progress” has been made to addressing all the weaknesses identified at the last inspection.

A new training advisory board, with direct oversight of apprenticeship training, has been established; and the chief executive and board have increased management capacity and expertise, to bring about rapid improvement, by hiring an experienced managing director.

The report singled this change out for bringing about “significant improvements to the quality of provision”.

A number of providers which had report published this week have also improved their safeguarding score from an early monitoring visit.

For example, Contracting Services (Education and Skills) Limited has made ‘reasonable progress’ in ensuring effective safeguarding arrangements are in place.

This was after Ofsted found on a visit in March it had made ‘insufficient progress’ in the area, and apprentices were unclear about who to go to within the provider if they have a concern.

Now though, apprentices are clear on how to keep themselves safe and what to do if they have a concern about a peer.

Another provider which has been found to have made ‘reasonable progress’ in safeguarding is EQV (UK) Limited.

They were inspected for a second time in this area, after the watchdog found previously that leaders had not checked staff had the right to work in the United Kingdom – this has now been rectified.

A third inspection focused purely on safeguarding was made of Piper Training, saying: “Leaders and managers have worked methodically to address adequately most of the significant weaknesses identified at the previous monitoring visit.”

Leaders have reviewed and amended safeguarding arrangements after the first inspection and made arrangements for safeguarding by subcontractors more stringent.

However, letting down the side this week was South East Coast Ambulance Service NHS Foundation Trust, which was found to have made ‘insufficient progress’ in two areas and ‘reasonable progress’ in one.

“Leaders have not made sure that the programme meets the requirements of an apprenticeship, including the development of English and mathematics skills,” the inspectorate wrote.

The provider also does not use data effectively, so senior leaders and managers do not know the current progress of learners and whether they will complete within the planned timescale.

Apprentices, meanwhile, are “not aware of the requirements of the end-point assessment or what the criteria for success are”.

This is the latest in a series of negative reports of NHS apprenticeship providers: in March, Poole Hospital was reported as being “unable to provide accurate information on the number of apprentices who remain on the programme”.

And in January, Walsall NHS Trust was rated ‘inadequate’ for its apprenticeship provision, once Ofsted found the trust was “not aware that the vast majority of apprentices are not making the expected progress on their programme”.

While University Hospitals Bristol NHS Foundation Trust had fallen foul of “ineffective strategic leadership, weak systems to secure trust-wide delivery and an absence of a clear understanding of what constitutes an effective apprenticeship training programme”.

A number of providers had reports published this week which found they had made ‘reasonable progress’ in all areas of an early monitoring visit. They are: Derwent Training Association; PET-Xi Training Limited; Port of Tilbury London Limited; Reed Business School; Xtol Development Services Limited; Keolis Amey Docklands Limited; KMF Precision Sheet Metal Limited; and Secom Plc.

Independent Learning Providers Inspected Published Grade Previous grade
British Printing Industries Federation Ltd 30/07/2019 29/08/2019 2 3
Contracting Services (Education and Skills) Limited 23/07/2019 28/08/2019 M M
Derwent Training Association 08/08/2019 27/08/2019 M N/A
EQV (UK) Ltd 14/08/2019 28/08/2019 M M
PET-Xi Training Limited 01/08/2019 26/08/2019 M N/A
Piper Training Limited 19/08/2019 29/08/2019 M M
Port Of Tilbury London Limited 07/08/2019 27/08/2019 M N/A
Reed Business School 18/08/2019 28/08/2019 M N/A
Xtol Development Services Limited 25/07/2019 28/08/2019 M N/A

 

Employer providers Inspected Published Grade Previous grade
Keolis Amey Docklands Limited 02/08/2019 28/08/2019 M N/A
KMF Precision Sheet Metal Limited 08/08/2019 27/08/2019 M N/A
Secom Plc 01/08/2019 29/08/2019 M N/A
South East Coast Ambulance Service NHS Foundation Trust 01/08/2019 29/08/2019 M N/A

WorldSkills 2019: Picture highlights from closing medal ceremony

See the victories of Team UK’s medal winners in this series of spectacular photos from the WorldSkills 2019 medal ceremony.

Gold medal winner in aircraft maintenance Haydn Jakes (second from left)

It was truly a night to remember for Team UK, which scored two gold medals, one silver and one bronze.

The golds went to aircraft maintenance competitor Haydn Jakes and beauty therapy’s Rebecca West, while the silver went to Conor McKevitt in car painting and the bronze to Phoebe McLavy in hairdressing.

Gold medallist Haydn Jakes at the WorldSkills 2019 medal ceremony

Haydn told FE Week after his win: “I wasn’t really expecting a gold medal, so for that to actually happen was a really pleasant surprise.”

While Rebecca said she was “really, really amazing and so proud”, and thanked her supporters.

“Amazing” was also how Phoebe said she felt; and Conor, who also won the UK’s best of nation for getting the highest score of any UK competitor, paid a “massive thank you” to everyone who had helped him achieve his two medals.

Team UK cheering on their team mates from the stands

The UK came in 12th place out of 49 countries; with the number one spot going to the host of the next WorldSkills in 2021, China, which will be holding the event in Shanghai.

In addition to the four medals, the UK also scored 15 medallions of excellence – which are awarded to competitors who are judged to have reached the international standard in their skill.

Gold medallist for beauty therapy Rebecca West

The event was addressed by Russian president Vladimir Putin, who said competitors “demonstrated outstanding techniques and skills, which you have refined and honed to virtuoso heights”.

See more amazing photos from the Kazan competition in FE Week’s forthcoming WorldSkills 2019 supplement, sponsored by Pearson.

Rebecca West
Silver medal winner in car painting Conor McKevitt
Phoebe McLavy receiving her bronze medal for hairdressing
Bronze medallist for hairdressing Phoebe McLavy
Team UK appear on the big screen, in front of tens of thousands, at the WorldSkills 2019 medal ceremony
Haydn Jakes (centre) in the winners circle after picking up his medal
Russian president Vladimir Putin addresses the WorldSkills 2019 medal ceremony

WorldSkills 2019: Rebecca West picks up gold medal for beauty therapy

Team UK has achieved a gold medal in beauty therapy for competitor Rebecca West.

The achievement means Britain retains its place as best in that category from EuroSkills in 2018, where Holly-Mae Cotterell was voted Europe’s best beauty therapist.

And it comes after Kaiya Swain came first in beauty therapy at WorldSkills 2017.

Rebecca, who is 22 and from East Sussex College, won silver at the Global Skills Challenge in Australia last April.

Meet the Government’s college finance Tsar who – like the NAO – will review DfE monitoring

The Government today announced Dame Mary Ney will lead a review into the way the Department for Education monitors college finances and financial management.

In May the then Skills Minister, Anne Milton, told Association of College conference delegates that there would be an “external review to look at the systems within the DfE, so that problems with financial management are identified at the earliest possible stage.”

Milton said at the time that: “I want to be able to show Treasury that every penny put into further education is spent wisely.”

The announcement today comes less than a month after the National Audit Office said they were also preparing to launch a value for money review on the management of colleges’ financial sustainability, as reported by FE Week.

Dame Mary Ney, according to the Government, has “been appointed to conduct the review given her extensive experience in local government, serving as Chief Executive of the Royal Borough of Greenwich and a government appointed commissioner to Rotherham Metropolitan Borough Council.”

Details of the appointment include a terms of reference for the review, which state: “In light of the financial difficulties at Hadlow and West Kent & Ashford Colleges, to review the way Government monitored and exercised its oversight of those colleges’ finances and financial management, and their effectiveness in practice, including the work of the ESFA and the FE Commissioner’s team; and to recommend changes that would reduce the risk of such problems recurring, taking account of colleges’ independence and the need to minimise regulatory burden.”

The findings from the review are expected to be published later this year and the DfE has been approached for comment.

The full biography for Dame Ney, published alongside the announcement today, reads: “Mary has had a distinguished 40-year career in local government, culminating in her serving as Chief Executive of the Royal Borough of Greenwich for 14 years during a period of major regeneration and service transformation in the borough, which won Council of the Year in 2013. She joined the DCLG Board as a Non-Executive Director in October 2016 and continued in this role for the MHCLG Board from January 2018.

“Mary carried out the Review of the Governance and Transparency of LEPs (often known as the Ney Review), which was published in October 2017. The recommendations were accepted by the Ministry of Housing Communities and Local Government (MHCLG) and are being implemented.

“In February 2015, Mary became one of five government commissioners at Rotherham metropolitan borough council, who assumed decision-making powers and were tasked with improving the council’s performance and helping rebuild the trust of local residents. Mary became Lead Commissioner in 2017 and oversaw the full restoration of powers back to the Council in 2018.

“Mary is a board trustee of two charities. She was made a Dame Commander of the Order of the British Empire in the 2019 New Year’s Honours List, for services to local government.”

WorldSkills 2019: UK wins 15 medallions of excellence

Team UK has taken home 15 medallions of excellence from WorldSkills 2019.

The medallions are earned by competitors who are judged to have reached the international standard in their skill.

Team UK’s medallions come after they won two gold, one silver and one bronze in the competition.

Medallions were awarded for the UK to Thomas Thomas in plumbing and heating, Elliott Dawson in CNC milling, Thomas Lewis in electrical installation, Thomas Andrews in electronics, Jack Dakin and Danny Slater in mechatronics, Elizabeth Newcombe in floristry, Callum Bonner in painting and decorating, Mark Scott in wall and floor tiling, Christopher Caine in joinery, Tonicha Robert’s in chemical laboratory technician, Lewis Greenwood in bricklaying, Samuel Taylor and Shea McFerran in landscape gardening, Sam Everton in cooking, Collette Gorvette in restaurant service, and Orlando Rawlings and refrigeration and air conditioning.

Its previous totals from WorldSkills 2017 and EuroSkills 2018 were 13 and seven respectively.