Further education providers face a 15 per cent cut in their adult skills budget allocations, the Skills Funding Agency (SFA) has revealed.

In a letter to providers, SFA chief executive Barbara Spicer said although funding for apprenticeships and traineeships was being “prioritised”, remaining funding would be cut by 15 per cent.

It provides the first indication of the impact of a 19 per cent two-year adult skills budget cut outlined in the Skills Funding Statement last month, and means the average-sized college could see between £400,000 and £800,000 wiped from its non-apprentice and traineeship adult skills funding.

Ms Spicer said: “In prioritising the funding for apprenticeships and traineeships, the remainder of the ASB will reduce by 15 per cent.”

Meanwhile, FE Loan pots have also gone up as directed by the 2013-16 Skills Funding Statement.

Martin Doel, chief executive of the Association of Colleges (AoC), said it had been a “significant” week for colleges, after a letter from Skills Minister Matthew Hancock last night revealed a 2 per cent cap on the financial impact of a 17.5 per cent funding rate cut for full-time 18-year-old learners.

He said: “Firstly, they received confirmation that the funding they receive to provide adults with skills and qualifications will decline by 15 per cent on average — a major, if not unexpected, disappointment.

“They then heard about the mitigation put in place to help those affected particularly badly by the cut in funding for 18-year-olds. We are pleased that the Minister has heard the concerns of colleges and MPs across the country.

“Both AoC and colleges understand that they need to take their fair share of austerity as the government seeks to rebalance the books.

“However, it is time for politicians to think seriously about what they want colleges to achieve on behalf of the nation and to what extent this should be funded by the taxpayer and to what extent by employers and the students themselves.

“For example, the Department for Education cannot continue to protect some of its budget and not the rest — this is unsustainable especially as we raise the education participation age to 18.

“Meanwhile, the Department for Business, Innovation and Skills needs to review the amount of money it devotes to adult students, in both further and higher education, and consider whether they are being treated equally with other students.”

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3 Comments

  1. The 15% cut is based on the original 2013-14 allocation irrespective of in-year growth. This year we grew our ASB contract through 2 variations and I’d have thought it would be reasonable to use our year-end earnings as the base line for a cut. Not so! No account is made of actual contract performance and therefore performing providers who have grown participation face a much larger ASB reduction. Talk about penalising success. The party-line from the SFA is to seek growth in Q1 but that is a sticking plaster over the issue. The SFA basically prevent you from growing an ASB contract by using the original allocation as the point of future allocations and not the actual performance – madness.
    I assume that a failing provider who under-performs by 15% or more will actually get a larger allocation than their actual performance – rewarding failure. It is allocation by computer, what is the point of trying to grow the contract and meet government priorities if they then cut the legs under you.

  2. Chris Todd

    It also looks as though they have used national delivery profiles to calculate individual provider allocations. The delivery profiles used should at least relate to the provider in question and not just a general figure with no logic behind it.

    I just hope there will be some moderation before this is finalised, but maybe not given the radical reduction in SFA staff.

  3. […] Setting the example, Croydon Council have highlighted that they had more than 2,600 Apprenticeship starts within their own organisation in 2012/13, which is admirable.  Local authorities around London and further afield do nevertheless face challenges in this area as relevant budgets face the prospect of being reduced.  The Skills Funding Agency (SFA) chief executive Barbara Spicer has said that, although funding for apprenticeships and traineeships was being ‘prioritised’, remaining funding…. […]