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LSC Funding 2008/09 Methodology and formula. "The move to a demand-led funding system in 2008/09 signifies a wholesale step change for the learning and skills sector.". LSC 27 November 2007. Nick Linford Head of Planning, Funding and Projects 17 December 2007. 250. 200. 150. 50. 0.

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LSC Funding 2008/09Methodology and formula

"The move to a demand-led funding system in 2008/09 signifies a wholesale step change for the learning and skills sector."

LSC 27 November 2007

Nick Linford

Head of Planning, Funding and Projects

17 December 2007






1. National Statement of Priorities 2008/09 - 2010/11

2. National Policy Summaries for 2008/09 (more than 80)

The reading material

Page count

The LSC bedtime reading

Complex landscape!


3. Funding Models for 2008/09 (including new formula)

After a summary of the new funding models we will focus on the new LSC funding formula for 2008/09

School 6th Forms

16-18 model

Entry to Employment

Adult learner responsive model

Further Education


Employer responsive model

Train to Gain

New funding models




* 16-18 apprenticeships planned and budgeted in 16-18 model (DCSF)


x this

= £

x this

+ this

Will get 2.1% real terms protection

4.2% in cash terms

Will get 2.1% real terms protection

The new funding formula

New ‘demand-led funding formula’ for FE, WBL and TtG

Introduction of:

Standard Learner Numbers (SLN)

National rates based on affordability

Provider factor

ALS allocated on a formula

There will be winners

and losers, as shown in this LSC graph for 16-18 funding


Qualification rates not published (DLC v3 this week?)

National rates not published (this week with DLC v3?)


Final values based on F05 submission 8 Feb 2008



Provider values not published and 40% negotiated


Protection (?) and negotiation of SLN allocation

The impact

It is impossible for us to model the financial impact at present because:





However, understanding the funding models and formula now (including related tools) will be invaluable for planning, negotiating and tendering for 2008/09.

More complex in reality

SLN could be listed or unlistedand has maximum per learner


£/SLN may be subject totransitional protection


PF has up to six elements,based on history (16-18 & adult)or actual (employer model)


ALS allocations will include formula and negotiation element


Total funding has a cap

The demand-led funding formula

Simple at first glance

Standard Learner Number (SLN)


National Funding Rate (£/SLN)


Provider Factor (PF)


Additional Learning Support (ALS)


Total funding

Oh, and three census dates replaced by minimum attendance

Full Time (1 FTE and 1.22 SLN)

Full Time (1 FTE and 1 SLN)

Part Time (0.5 FTE and 0.5 SLN)

Guided Learning Hours

Standard Learner Numbers

SLNs replace the National Base Rateand will either be listed on the Learning Aims Database, or unlisted and based on guided learning hours in A32

SLNs (divisor)08/09

NBR (loadbands)07/08

Glh / 450 = SLN with a learner cap a1.75 SLN per year

Calculating a learner SLN

Example for 4 AS levels (listed 0.33 each) = 1.32 SLN

one learner Basic Skill in 90glh (unlisted) = 0.20 SLN in one year Entitlement (listed) = 0.25 SLN

= 1.77 SLN

But this exceeds 1.75 per year cap, so this learner SLN is in fact 1.75

= 1.32 SLN

The SLN value is actually allocated to a year based on number of days between start and actual end date

The LSC will continue to review rates, and will annually change some listed rates and make others unlisted (and visa versa)

When do SLNs count?

This is commonly referred to as the definition of a start

The three funding census dates have been scrapped

Instead there are minimum attendance measures, based on duration

If an enrolment meets the minimum attendance criteria the SLN value assigned in the given academic year will be counted

Resits, retakes and transfers do not generate an SLN value

Things to note:

  • This national rate (£ per SLN) will be different for each model

  • It will be set based on affordability

  • Rates for 08/09 will go up less than 2.5% (e.g. 2.1% for 16-18)

  • The co-funded rate will fall each year as fee % increases

The National Funding Rate per SLN

The LSC will set a fully-funded and co-funded £ per SLN each year

e.g. 1.32 SLN x £2,750 NFR = £3,630

But the story does not end here as we must now apply theprovider factor

The Provider Factor

Each funding model has its own provider factor, and only changes in year to reflect actual delivery within Employer Responsive Model

Area Cost (e.g. 1.200)


Disadvantage (e.g. 1.079)


Programme weighting (e.g. 1.217)

Provider factor (e.g. 1.334) =


Short-programme modifier (e.g. 1.001)


Success factor (e.g. 0.846)

e.g. 1.32 SLN x £2,750 NFR x 1.334 = £4,842.42

Use the formula at learner level

If the NFR is £2,750 and PF is 1.334, then how much funding?

1.73 x £2,750 x 1.334 = £6,346.51

Use of the formula at allocation level

Can you work out what this adult responsive allocation would be?

  • 5,000 learners of which 2,000 are fee paying

  • Average SLN per fee paying (co-funded) learner is 0.8

  • Average SLN per non-fee paying (fully-funded) learner is 1.2

  • Co-funded NFR is £1,607

  • Fully-funded NFR is £2,700

  • Provider Factor is 1.334

  • £1m for Additional Learning Support

1,600 SLN x £1,607 NFR x 1.334 = £3,429,981 co-funded

3,600 SLN x £2,700 NFR x 1.334 = £12,966,480 fully funded

+ £1,000,000 ALS

= £17,396,461




Part time adults









When is a learner number not a learner number?

When it is a ‘Standard Learner Number’

SLNs are a new volume measure that are not the same as FTEs.Caution recommended when used for non-funding purposes.

Find out more at