The Skills Funding Agency (SFA) has told FE Week that despite more than doubling the funding rates for functional skills qualifications in English and maths when delivered in the workplace, they will not automatically increase provider allocations.

This comes after FE Minister Matthew Hancock announced the increase at AoC’s annual conference, branding it a “scandal” that many Britons “couldn’t read or add up properly”.

A spokesperson for the SFA said:  “Providers will be funded for all qualifications and programmes through their existing 16-18 Apprenticeship budget and single Adult Skills Budget.”

However, providers could renegotiate their 2012/13 allocation as part of the SFA quarterly review process.  The spokesperson said: “The Agency will review performance of providers against their maximum contract value, through its published performance management arrangements.”

When asked to estimate the cost of the rate increases, the Agency was unable to provide a figure: “The amount paid to providers for the total amount of these qualifications will depend on the choices made by learners and employers and how many enrol on courses covered by these rate changes,” said the spokesperson.

The SFA has confirmed that the rate increases range from £152 per qualification, as part of a 24-plus  apprenticeship, to a £411 rise per qualification for adults when not delivered within an apprenticeship.

FE Week estimates the rate increase could cost more than £30m for 16-18 apprenticeships, and more than £70m for adults.

Jayne Stigger, head of maths at Bournemouth and Poole College, responded to FE Week’s detailed calculations, tweeting: “Agree on the estimate. Question is, will it be cost effective?” A fellow tweeter, FE Funding Guru, posted: “Seems like a reasonable and possibly conservative estimate.”

Carol Taylor, director of development and research at NIACE, said as “early and enthusiastic” supporters of the functional skills rate increase, it “welcomed” the news.

“Indeed, for those learners on apprenticeships and work-related courses, raising the rate by more than 100 per cent is very good news for very many learners,” she said.

However, with the funding rate increase only applying to workplace learners, she added:  “NIACE urges the Minister to consider how we utilise funding to up-skill those learners, often doing something to improve their English and maths for the first time. Those with the poorest skills often need a longer time to achieve and more innovative ways of teaching.”

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