2. Contents > Funding formula in brief > Learner-responsive age split > SLN per learner ratios > 16-18 National Rate > Provider factor > Success factor > Value for money > 14-19 targets and future Don’t be afraid to snooze, but please first complete your postcard to ensure you get a copy of these slides

3. Learner-responsive formula in brief Standard Learner Numbers (SLN) X National Funding Rate (NFR) Provider Factor (PF) Additional Learning Support (ALS) Funding X + = LR funding is an enrolment based formula, although it is applied the same way for allocations Example funding for an AS level qualification in 09/10 150 SLN GLH / 450 = 0.3333 SLN X £2,920 NFR 1.123 PF £0 ALS £1,093 X + = Example for an allocation 3,123 SLNs X £2,920 NFR 1.123 PF £500,000 ALS£10,740,817 X + =

4. LR age split One funding stream Adult LR (DIUS) 16-18 LR (DCSF) FE mainstream Two funding models Has become * Could be higher with entitlement funding > Plan-led ‘v’ reconciliation > Different funding rates > Different provider factors > Different enrolment patterns > 2 nd year 19 year-old complexity We revised our Planning File to apply the new funding methodology, and set age and fee related sub-targets This separation requires careful management of both planning and performance Planning for mixed groups of which (sub-targets) 16-18 19+ FF 19+ CF Learners in the group 181062 SLN per learner 1.21.2*1.2 Total SLN21.6127.22.4 Funding rate n/a£2,920£2,817£1,804 Provider Factor n/a1.1231.321 Total£72k£39k£27k£6k

5. SLN per learner SLN per learner ratio represents average funding size of a learner programme (before weightings) 2200 2600 3000 3400 2007/082008/092009/10 Learners down yet SLNs up? SLNs Understand the FT/PT mix, even if the LSC have stopped asking Learners The LSC have used this ratio to set 2009/10 allocations based on ratios in 07/08 and 08/09 F01 Do you know why and when your SLN ratio changes? Shifts in learner type and/or changes to the curriculum? The SLN is LSC currency, the FR x PF is the exchange rate Example above07/0808/0909/10 16-18 learners2,5002,4502,400 Total SLNs3,0003,0303,060 FT learners2,0002,0502,100 FT SLN ratio1.4 PT learners500400300 PT SLN ratio0.4 Total SLN ratio1.201.241.28

6. Provider factor Calculated for 09/10 based on your full-year 07/08 data (ILR) Programme weighting X Disadvantage uplift Area costs uplift Short programme modifier X x Success Factor Provider Factor x = 16-18 national rate 2008/09 = £2,860 2009/10 = £2,920 2.1% increase but still 3% less than school sixth forms Some colleges will have a transitional rate calculated by the LSC. This is to prevent any significant LR winners or losers High transitional rate = loser Low transitional rate = winner Did you know? TtG rate (£2,987) is 2.3% greater than 16-18 rate

7. Success factor simplifies and terrifies Replaced 3 funding census dates and achievement factor 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 historical, think of this as 50% lost if a learner does not finish and achieve Learners Income lost Success rate Target group size of 16 at £5k each (£80k income budget) Do your staff know the impact class size, retention and achievement have on 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%£25k8 succeed 73% achieve £7.5k 3 finish but don’t pass

8. Value for Money The LSC, YPLA and/or LAs may try to compare provider SLN ratios to judge VfM A provider with a low SLN ratio may look more attractive to the relevant funding agency But….. The SLN ratio says nothing about the curriculum mix (e.g. number of functional skills) It is also only part of the story when it comes to the actual average cost per learner College A 1000 learners 1300 SLNs SLN ratio of 1.3 1300 x £2,920 = £3.8m College B 1000 learners 1400 SLNs SLN ratio of 1.4 1400 x £2,920 = £4m Success factor = 0.9 1300 x £2,920 x 0.9 = £3.4m Success factor = 0.8 1400 x £2,920 x 0.8 = £3.3m

9. 14-19 national targets Achieving Level 2 at age 19 (from 71% to 82% by 2010) Achieving Level 3 at age 19 (from 47% to 54% by 2010) Reducing the NEETs (by two percentage points) DCSF Curriculum reform: GCSEs A-Levels Diplomas Apprenticeships Foundation Learning Tier (Progression pathways) Limited stand-alone qualifications 14-19 ‘next steps’ Legislation: 2010: LAs have all 14-19 funding 2013: All 16 year-olds in training 2014: All 17 year-olds in training With phased introduction of guarantees and entitlements 1 in 15 to 1 in 5 on an Apprenticeship Ed Balls is the current Minister – so far this week!

10. And finally…. This presentation and other resources are available online Complete and leave your card for access Oh, and the unofficial funding guide is proving popular with a wide range of FE staff www.fundingguide.co.uk

11. Thank you Any questions?