2. Three in one Published 18/11/08 Whilst the funding guidance is now published in 6 documents, this publication combines three. 1. Government Investment Strategy 2009-10 2. LSC Grant Letter 3. LSC Statement of Priorities Although more than 60 pages the priorities and targets remain relatively unchanged This presentation focuses on the impact to funding and learner distribution

3. Total funding £12.2bn a rise of 4.5% from 08/09 Total learners 4.7m a reduction of 2.5% from 08/09 DIUS 37% + 5.9% DCSF 63% + 3.7% This includes: School Sixth Forms 16-18 FE and E2E Apprenticeships (16-18 and 19+) Specialist LLDD (16-18 and 19+) Adult Learner Responsive Adult Safeguarded Learning Employer-responsive (TtG) Offender Learning Learner Support and Development Capital Grants LSC Administration DIUS 69% - 3.6% DCSF 31% - 0.1% This excludes 69% growth of academies from 16k to 27k learners (not funded by LSC) There is also £250m ESF (rise of 3.9%) match-funding 117k learners (reduction of 5.6%)

4. Funding by model 16-18 FE (incl E2E) Employer Responsive (all ages) 19+ Learner Responsive + 7% - 2% + 12% £3.7bn 50% 16-18 FE (incl. E2E) £2bn 27% ER (all ages) £1.7bn 23% ALR 16-18 FE (incl E2E) Employer Responsive (all ages) 19+ Learner Responsive 0% - 10% Shift from 08/09 to 09/10 + 5% Learners by model Shift from 08/09 to 09/10 861k 23% 16-18 FE (incl. E2E) 1.4m 38% ER (all ages) 1.5m 39% ALR 2009/10 funding 2009/10 learners

5. 16-18 FE (incl. E2E) SLN rate rises 2.1% to £2,920 Transitional protection in funding per SLN of +/-2.1% in real terms remains Learners unchanged 861k 2009/102008/09 Funding increases 7% £3.7m£3.46mFE (incl. E2E) 2009/102008/09 This increase in costs relates to more full time learners, higher success rates and introduction of 14-19 diplomas. However, the LSC intend to “control unit costs and improve value for money” FE (incl. E2E) Funding rate gap with schools remains unchanged at 5.61% Annually fixed allocations are to be reconsidered to ensure funding follows the learner “Additional qualifications must be aligned to the needs of the learner and be affordable” Additional Learning Support to rise by approximately 3%

6. 19+ Learner-responsive SLN rate rises 1.5% to £2,817 No more transitional protection Learners decrease 10% 1.469m1.626mLearners 2009/102008/09 Funding decreases 2% £1700m£1735mFunding 2009/102008/09 Fee element rises from 42.5% to 47.5% of unweighted rate Skills Accounts to be piloted in all regions Adult Safeguarded Learning remains at £210m but learners fall from 630k to 605k Pre-Level 2 flexibilities to deliver “more or less Skills for Life, Foundation Learning Tier or developmental learning than the indicative figures agreed during the allocation process” Flexibilities will also be built into the 08/09 reconciliation process The only learner reduction applies to developmental learning, falling 51% to 271k

7. Employer-responsive “Our two flagship programmes will continue to grow over the next year” Apprenticeships Train to Gain “Apprenticeships are the Government’s preferred work-based route for all young people aged 16 to 24” Train to Gain rate 6% higher than 19+ Apprenticeship rate £1967m£1754mTotal ER £926m£797mTrain to Gain £1041m£956mAppren’s 2009/102008/09 Appren’s Train to Gain Total ER + £85m + 16% + 12% + 9% + £128m + £214m ER funding (all ages) 1.4m ER learners in 2009/10 Train to Gain + 5% 949k 67% Appren’s + 5% 477k 33% Train to Gain fully-funded level 2, unlike 19+ Apprenticeships

8. Apprenticeships Minimum wage rise from £80 to £95 per week Increase from 1 in 15 to 1 in 5 young people starting and apprenticeship by 2019/20 National Apprenticeship Service (NAS) launched April ‘09 Apprenticeship funding £1042m£956mTotal £367m£328m19+ £675m£628m16-18 2009/102008/09 16-18 19+ Total + £47m + £38m + £85m + 12% + 9% + 7% 477k learners in 2009/10 254k 53% 223k 47% 19+ + 5% 16-18 + 5% Co-funding for 19+ remains and fee element rises to near 47.5% 16-18 rate rises 2.1% to £2,920 19+ rate rises 1.5% to £2,817 So 16-18 rate 3.7% more than 19+

9. Train to Gain Extra £30m to support the provider capacity building SLN rate rises 4.5% to £2,987 Co-funding for ESOL and some level 3 learners, with fee element rising to 47.5% of total funding Learners increase 5% 949k900kLearners 2009/102008/09 Funding increases 16% £926m£797mFunding 2009/102008/09 Uncertain what impact new flexibilities such as introduction of ‘bite-sized’ learning will have on learner growth – could be much greater than planned Learner growth looks modest! £926m in 2009/10, which includes £37m for brokerage costs and £8m for level 4 Flexibilities for ‘bite-sized’ learning introduced in 2008/09 (starting Jan ’09)