T Level funding to be lagged from 2027

Funding allocations for T Levels will be lagged from 2027, the Department for Education has confirmed. 

Guidance published this week says allocations for colleges and schools will be based “solely on student numbers from the start of the previous year”. It means the use of estimated student numbers will end, but in-year reconciliation will continue. The current registration process for new T Level providers will also be scrapped.

The change will bring T Levels in line with other 16 to 19 study programmes, which are already funded through a lagged model. It means a college’s T Level funding allocation for academic year 2027-28 will be based on the number of students the college says it has in its individualised learner record (ILR) data return (R04) in November 2026.

T Level allocations are currently worked out using “carry-over” students from ILR and provider estimates of new starters submitted each autumn. Those estimates are then checked against actual enrolments later in the year. Funding is then adjusted through a reconciliation process. 

T Level recruitment has repeatedly fallen short of expectations. A National Audit Office report earlier this year found starts on the flagship qualifications were as much as 75 per cent below government targets. 

Funding colleges based on last year’s students rather than estimates gives colleges some certainty over how much funding they’ll get, but can also leave them exposed to financial risks if student numbers rise suddenly.

Lagged flaws

Colleges are currently grappling with surging numbers of 16 to 19 year olds, with DfE placing limits on how much growth can be funded in-year.

 Julian Gravatt, deputy chief executive of the Association of Colleges, said there was an  “administrative logic” to the T Level funding change, but “only if we’re at a point where enrolment levels are fairly predictable and manageable.” 

He told FE Week: “The main 16-18 funding system works well in some respects in that it gives colleges a year to adjust their staffing and costs to take account of changing enrolment numbers but it’s working badly in other respects because there is a rising population of young people, an increasing demand for technical subjects, DfE’s budgets are fixed on an April to March cycle and student choices aren’t confirmed until the second half of August.

“Meanwhile fixed budgets and rising demand leave thousands of young people without places each autumn.”