1. 22 nd January 2010 Barking College Nick Linford Special Adviser on Funding and Performance (formally Director of Planning and Performance at Lewisham College) Summary of funding changes and the implications for the future

2. Funding reform in 2008/09 Adult LR (BIS) 16-18 LR (DCSF) Old funding stream FE mainstream New learner and employer- responsive funding models 16-18 ER (DCSF)19+ ER (BIS) Work-based Learning Old funding stream Last year demand-led funding became a methodology and formula to fund FE mainstream, Apprenticeships, Train to Gain and Entry to Employment New terminology:SLN x NFR x PF (weightings) = Funding New inflexibilities:

3. Investment Strategies and MoG Funding colleges and other providers YPLASFA Local authorities DCSF BIS

4. 16-18 LR (FE) 16-18 Appren Adult LR 19+ ER Adult LR 19+ ER Demand-led funding budgets 16-18 LR (FE) 16-18 Appren £7.5bn BIS DCSF FundingLearners 4m 2010/11

5. Demand-led funding budgets DCSF +7.5% 2010/11 Funding + 6.6% + 12.2% -11.5% -0.1% 16-18 LR (FE) 16-18 Appren Adult LR19+ ER BIS -6.5% Total +2.0% + 1.1% + 10.4% - 25.3% + 23.3% DCSF +2.7% Learners BIS -2.1% Total -0.7%

6. The double whammy 16-18 LR & ERAdult LR19+ ER Not rate increase3% rate decrease3% rate decrease (19-24 Appren) 13% rate decrease (25+ Appren) 6% rate decrease (Train to Gain) 50% fee element 50% fee element (incl. non-first Level 2 TtG) 14% SfL weighting reduction Massive developmental learning cuts 10% allocation cut confirmed as best case scenario In-year adjustments between providers Challenge expensive colleges/programmes Roll-out of Functional Skills 14-19 Qualification Strategy In many cases, to achieve lower allocations will require more delivery

7. Fundable qualifications Strategies and Prioritisation (UKVQRP and QCF) OfQUAL (accredit and put on NDAQ) JACQA (15 organisations) & DCFS SSCs, UKCES RDAs, NAS SFA & BIS YPLA SFA Data Service Learning Aim Database Available for funding To set funding rates This process can take six months+ from accreditation To determine funding eligibility 14-19 Adult

8. Enrolment funding 0.5 + Success Factor = Weighted average success rate 2 0.5 + 0.9 = 80% for College X 2 0.5 + 0.5 = 0% for College Y 2 Although based on a historical average, it means 50% lost if a learner does not finish and achieve Group 1 Income lost Success rate Target of 16 recruited at £5k each (£80k income budget) Do staff know the impact of class size, retention and achievement have on learner-responsive (FE) income? Budget missed by 31% Next allocation cut by 31% 14 start£10k 2 leave within first 6 weeks 79% retention £7.5k 3 more do not finish 57% SR£25k8 succeed 73% achieve £7.5k 3 finish but do not pass Funding allocations are reduced by a success factor

9. Now it’s your turn Group 2 Income lost Success rate Target of 20 recruited at £4k each (£ k income budget) Budget missed by % start£ k 3 leave within first 6 weeks % retention £ k 2 more do not finish % SR£ k succeed % achieve £ k 4 finish but do not pass 80 Target of 18 recruited at £6k each (£ k income budget) 108 12 4 8 241165 73 88 17 30 Group 3 Income lost Success rate start£ k 6 leave within first 6 weeks % retention £ k 2 more do not finish % SR£ k succeed % achieve £ k 1 finishes but do not pass 36 6 3 45975 90 83 12 Budget missed by % 42

10. Opportunities post-recession E. Employability and Skills Programme (BIS) E D. Response to Redundancy (BIS) D C. Young Person’s Guarantee (BIS) C B. Six Month Offer (BIS) B A. Flexible New Deal (DWP) A Funding 2010-11 £500m New funding pots to train the unemployed

11. J J I I H H G G F F E E D D C C B B A A Example college now B. 16-18 LR incl E2E C. Adult LR D. Apprenticeships E. Train to Gain F. HE Direct G. HE Indirect H. ESP (or SfJ) I. Six month offer J. Response to Redun’ £34m Government fundingFunded learners BIS funding (19+) DCSF funding (14-18) 15k A. 14-15 year olds (WRL)

12. Example college next year? B. 16-18 LR incl E2E C. Adult LR D. Apprenticeships E. Train to Gain F. HE Direct G. HE Indirect H. ESP and R2R I. Six month offer J. YPG K. FND Government fundingFunded learners BIS funding (19+) DCSF funding (14-18) A. 14-15 year olds (WRL) DWP funding (18+) AA B B C C D D E E F F G G H H I I J J K K £37m19k

13. Any questions? So both funding cuts as well as opportunities, with a heavy emphasis on efficiency, priorities and performance