Revealed: Complex allocations for the ‘targeted level 3 adult offer’

Just over £118 million has been set aside to pay for the new “targeted level 3 adult offer” across England – but the cash will come from two different education budgets.

From next month until the end of July 2022, “core funding” of £100 million will come from the new National Skills Fund (NSF) along with £16.25 million to pay for an “uplift” for learners aged 24 and over.

The remaining £2.5 million, to pay for an “uplift” for learners aged 19 to 23 will not come from the NSF but will instead be funded from the adult education budget (AEB).

The uplifts are £150 extra for short qualifications (less than an indicative 360 hours) and £600 for long qualifications (360 hours or more).

The level 3 adult offer was first announced by prime minister Boris Johnson last October and forms part of the “lifetime skills guarantee”.

It will fully fund around 400 short and long qualifications at level 3, making them free to learners aged 19 and over who do not already have a first full level 3 qualification.

The Department for Education has so far refused to say how much funding has been allocated for providers to deliver the new offer.

But the total NSF and AEB budgets for the level 3 adult offer were revealed in a letter sent by the Education and Skills Funding Agency to the Mayor of London, Sadiq Khan.

The letter, dated February 3 and marked “official sensitive”, has been published on the Greater London Authority website.

It explains how the complex budgeting arrangements filter through to an even more complex set of funding allocations for providers in both non-devolved and devolved areas.

The funding will be routed through the AEB funding formula and rates, but all the NSF funding is “ringfenced” and will be clawed back if not spent on the “level 3 adult offer”.

For learners aged 24 and over, their level 3 adult offer core funding and uplift would be funded from the NSF in this way.

But the letter reveals for the first time that it is much more complicated for those aged 19 to 23.

If a 19-to-23-year-old chooses a qualification “that is included in both the level 3 adult offer and the 19-to-23 level 3 legal entitlement” then both the course and uplift funding is not ringfenced and comes from the AEB budget and not from the ringfenced NSF.

In this example, just the £150 and £600 uplifts would be funded from the £2.5 million set aside for this purpose.

But, if a 19-to-23-year-old chooses a qualification “on the level 3 adult offer list that is not included in the 19-to-23 level 3 entitlement, then the funding for the course and the uplift will come from the ringfenced NSF funding”.

‘The department is allocating this amount at its own risk’

The letter also says £23.75 million of the £118 million relates to April and July 2022 which “falls outside the current spending review period and the department is allocating this amount at its own risk.”

These highly unusual and complex budgeting arrangements are expected to be “transitional”, coming after publication of the FE white paper – but before a consultation on the new NSF.

Last week, on an FE Week webcast, Keith Smith, the DfE director of post-16 strategy responsible for the FE white paper, said the NSF consultation would be published in the spring.

The FE white paper promises “simplification and streamlining of funding” but Smith conceded that introducing programmes with brand-new funding rules and methodologies do add further complexity to an already complicated system.

As reported in FE Week he also said: “Please don’t take anything that happens in the short term as any sort of indication of where the future intent will be.”