Welcome news as SFA publish provider funding allocations for 2016/17

This afternoon the Skills Funding Agency (SFA) sent colleges and training providers their eagerly anticipated funding allocations for next year.

As outlined in the Skills Funding letter for 2016-17, the new Adult Education Budget is to be kept for the next four years at £1.5bn, allowing for the SFA to end the cycle of annual cuts. Priority areas such as apprenticeships and traineeships see automatic provider allocation increases and advanced learner loan facilities, which will be also available for 19 to 23-year-olds for the first time next year, also automatically increase.

The SFA statement to providers reads: “We have now issued provider allocations for the 2016/17 funding year, which includes:

– Maintaining contract values at 2015/2016 (as at January 2016) for the newly formed adult education budget

– 19% increase on delivery over the 12 months from December 2014 to November 2015 for 19+ apprenticeships allocations

– 3% increase on delivery over the 12 months from December 2014 to November 2015 for 16-18 apprenticeship allocations

– 24% increase on delivery over the 12 months from December 2014 to November 2015 for SFA-funded 16-18 traineeship allocations

– 29% increase on advanced learner loan facilities, from current commitments




As reported in FE Week, the allocations had been held up by the Budget last week.

The Skills Funding Agency go on to say: “We have made great progress, with the support of our stakeholders, in simplifying the funding system, so far we have:

– begun work on preparing the sector for the devolution of the adult skills budget by publishing the Adult Education Budget: Changing Context and Arrangements for 2016 to 2017

– enabled grant funded providers to use their adult education budget more freely and flexibly in line with local priorities by allocating these funds as a block grant

– started to work with areas with devolution deals to help support their dialogue with their local providers about what will be delivered in 2016/17

– used a simple allocations methodology across all funding streams

– reviewed and rationalised the way we present our funding rules documents, early feedback suggests that this has been well received by our providers – Some 74% of respondents approved of the extent to which our funding rules have removed bureaucracy and simplified the funding system, which remains the same as last year.

– streamlined performance management arrangements for 2015 to 2016

– We have given colleges and other training organisations more flexibility to respond to the needs of their local area, using eligible qualifications and/or their components or bespoke, locally designed or tailored training provision (for example, employability skills and confidence-building).”

The SFA continued: “Over the next few years, we will be changing the basis of our allocation methodology in support of the government’s plans to devolve the adult education budget to local areas: this may result in changes to individual provider allocations over that period. Providers will need to plan for this. We are working with our Funding Reform and Localism Steering Group to develop proposals for how the allocations methodology will change.

“In the funding statement and covering letter issued to providers with their funding allocation, we have signalled that apprenticeship allocations from April 2017 may be subject to change as new starts begin to come through the Digital Apprenticeship Service.  It is important that providers factor this into their planning.  More information on the apprenticeship levy operating model will be published in April.

“We have recently opened applications for growth in line with performance point 2 in our performance management rules 2015 to 2016. We will also be publishing soon criteria for a targeted growth exercise on apprenticeships that we are going to run, ahead of the start of the 2016/17 funding year (related to 2016/17 allocations).”

Commenting on the announcement, Martin Doel, Chief Executive of the Association of Colleges, told FE Week: “It’s good to see the Spending Review commitments being confirmed in year one of the settlement.  After years of damaging cuts these allocations give colleges a firmer base to build on in maintaining services to their students, communities and employers.  It would be even better if the allocations had been earlier and if they could be made on a multiple year basis.”

Stewart Segal, Chief Executive of the Association of Employment and Learning Providers said: “The increase for adult apprenticeships is very welcome and is further recognition that apprenticeships are regarded as an all-age programme. It will help to reverse the decline in starts we have seen so far this year for the 19-24 age group. Providers will also be pleased that they have an opportunity to offer more traineeship opportunities for young people as the programme is proving to be an effective stepping stone to an apprenticeship and sustainable employment.”

If you have a view on the allocations for 2016/17 please leave a comment below.

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  1. We also hope that the SFA will respond to the growth requests for additional 16-18 apprenticeships this financial year which will mean that some providers will need more than the 3% increase on contracts. After the raising of the participation age, funding an apprenticeship for this age group means that the young person doesn’t have to be funded by the DfE to be in a classroom, so we should looking at removing the cap on growth. The SFA has to keep this under review once provider growth requests are considered in April. We have to ensure all growth requests for quality apprenticeships for this age group are met.

  2. Mike Farmer

    Two things caught my eye.
    The first sign of the impact of Devolution Deals on providers in Greater Manchester, West Yorkshire and Sheffield where the combined authorities (CAs?) now have control of the AGE budgets and providers are warned that they are ‘likely to see a greatly reduced 2016/17 AGE facility from the SFA’. Interesting to see how this is going to work.
    Rampiing up of Advanced Learner Loans allocations: providers with ALL facility will see an automatic 29% increase on their current loans commitment. Will they be able to use it?

  3. Alan J Green

    Any stability in funding can only be good news in an ever-changing sector. It will be interesting to see the changes the new levy scheme will bring upon future funding? A levy and an employer contribution may be too much for some. 19 percent increase in 19+ apprenticeships funding is good news . The latter may be response to the anticipated effect of raising the age of participation? Are we to anticipate more 16-18 yr olds will stay in sixth form rather than apprenticeships?

    Lots going on in the training and Apprenticeship world with funding, the levy, degree apprenticeships, employer led trailblazers area reviews which may well result in stronger super colleges, devolution to LEPs, the creation of the Northern power house, and what seems like the inevitable increase in School Academies owned and run by conglomerates of the same who may well enter the SFA funding arena as they widen their offer and seek funding from multiple streams. Its an exciting time with many opportunities to promote success and develop participation. Lots of thought provoking possibilities ahead. At the risk of being cynical watch an election mid term go and turn it all on its head.