Funding future faces further formulation

Implementation of a new streamlined and simplified funding system for adult skills that had already been delayed until 2013/14 has suffered a further setback, following a rethink on how apprenticeships might be funded.

A newly formed Skills Funding Agency advisory group has been meeting monthly since December, and has said plans to fund apprenticeship provision based on individual frameworks, rather than component learning aim level, requires further testing.

Chris McLean, vice principal of North Hertfordshire College and member of the Funding External Technical Advisory Group told FE Week: “Only two areas related to basic skills and apprenticeship rates have more work to be done and on both counts it’s the work and scrutiny of the group that is asking for extra detailed modelling to be undertaken to satisfy ourselves that the new system will work at the organisation level as well as for the sector as a whole.”

A document published this week by the SFA, entitled ‘A New Streamlined Funding System for Adult Skills’, says “following advice from the Funding External Technical Advisory Group we are reviewing this [apprenticeship funding]. We are continuing to consult and develop our approach to simplify apprenticeships funding and align it to the principles across the rest of the Adult Skills Budget.

“As a result we now expect to be able to publish the principals and rates for funding Apprenticeships no later than May 2012.”

The first version of the funding reform document was published in October 2011 and included a plan for ten apprenticeship framework funding rates within the ‘learning aim rates matrix’ of 30 rates.

This updated version now excludes apprenticeships, and the remaining provision has doubled to 40 rates.

Mick Fletcher, a visiting Research Fellow at the Institute of Education and consultant, says the document shows that the government is struggling to streamline or simplify the funding system for adults.

“Once again simplification proves not to be as easy as the Department thought,” Mr Fletcher said.

“They are still struggling to accommodate basic skills, and can’t yet work out how apprenticeships fit; and they didn’t even try to cover safeguarded learning.

“The reason for the difficulties just might be that it’s not really about simplification at all, but about imposing a centrally determined, price based funding system instead of one that carefully reflects colleges’ costs.”

David Hughes, chief executive of NIACE and until recently the Director of Provider Services at the Skills Funding Agency, said: “We want to work closely with the government and the SFA to try and get a system which has the right sort of incentives for people who it should support and help them not only get into learning, but to succeed as well.

“We want to make sure that any changes do not disadvantage certain types of learners and that those changes recognise the very diverse needs of different learners in different situations.”

The SFA proposals also appear to scrap well trailed plans for Outcome Incentive Payments, and replace them with the piloting of a payment to the provider of half the 20 per cent of achievement funding where eligible unemployed learners prematurely leave their course to get a job.

The document reads: “Job outcome funding will be piloted in 2012/13 using the existing funding models, with 10 per cent job outcome funding where a learner leaves and enters work without achievement of the learning aim.

“This is straightforward in workplace learning, however, in classroom learning the funding will be factored into the year-end reconciliation.”

Plans are also outlined for introducing a funding cap for apprenticeship learners. The report states: “An annual funding cap of £4,400 (applied to the unweighted rate) per learner will be piloted during 2012/13 shadow working.

“The level of an annual funding cap for Apprenticeships is still being considered as part of the work set out above.”


Paul Champion
Strategic Project Manager

Mobile: 07540 704920

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