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Government policy and College funding Julian Gravatt, Assistant Chief Executive Association of Colleges 11 March 2013. What this presentation covers. Issues in national government and public spending 16-18 education reform, 19+ FE/Skills, Loans High need pupils, Financial support

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Government policy and college funding julian gravatt assistant chief executive

Government policy and

College funding

Julian Gravatt, Assistant Chief Executive

Association of Colleges

11 March 2013


What this presentation covers

What this presentation covers

Issues in national government and public spending

16-18 education reform, 19+ FE/Skills, Loans

High need pupils, Financial support

Some conclusions

Julian Gravatt

Assistant Chief Executive

Association of Colleges

[email protected]

@JulianGravatt


The last five years

The last five years

.


The coalition government

The Coalition Government

Coalition in place until 2015?

School reform key Coalition priority

Some long-term reforms

(eg Universal Credit, public sector pensions)

No economic recovery -> Short-term fixes

Document to read

The Coalition’s Mid-Term Review

January 2013

49 pages

Number 10 website


Uk govt deficit

UK govt deficit

2010 plan (“Plan A”) - close deficit 80% by spending cuts

Some tax rises (eg VAT to 20%)

Spending cuts 2011 to 2015

2011-12

Spending & income less than plan

2012-13

Deficit likely to be going up


The uk govt budget

The UK govt budget

The plan

Deficit reduction via

An economic recovery

Real-terms spending cuts

Balance of spending

Pensions, benefits & interest

continue to rise

Cuts in overall DEL

Spending review

Totals revised in Dec 2012

Review planned in 2013

Source: Autumn statement


2013 spending review issues

2013 spending review issues

Protected departmental budgets

NHS, Schools, Overseas aid

Hard to cut budgets

HMRC, Devolved, Defence

Looking pretty vulnerable

Local Govt, Post-16 education

Still to be decided

2013 Spending Review may only cover period to 2015-16


Post 16 education budget

Post-16 education budget

Annual budgets

HE teaching grants replaced by student loans to pay fees but also for maintenance

SFA funding protected in 2010 spending review

At risk post-2015

16-18 education budget

static since 2010

Lack of clarity about future

Source: BIS/DFE statements plus OBR loan projection


Funding challenges in 2013

Funding challenges in 2013

16-18 and 19+ budgets will both be smaller in 2013-14 AY

Two new funding formulae (16-18, Skills)

Delegation of 16-25 high cost pupil budgets to Councils

New FE Loan system (24+ Advanced Learner Loans)

Other initiatives (Employer Ownerships, City Deals, Traineeships etc)

The squeeze on household and company finances


16 18 education budget

16-18 education budget

DFE has ensured 5-16 Schools

budget rises with inflation

Tough 2010 16-18 settlement

Lagged number funding system

16-18 numbers down in 2011-12 and down in 2012-13

New 16-18 funding formula in 2013-14 is cost-neutral but will

redistribute funding

Yr 1 numbers drive Yr 2 budget

2012-13 allocations vs 2011-12

FE Colleges down 3%

Sixth Form Colleges down 2%

Source: EFA funding team


New 16 18 formula

New 16-18 formula

Designed with care to create a different way to do thi

£ = ((Students * Rate * Retention Factor + Disadvantage)

* Area Cost) + Formula Protection Grant

Funding per student rather than per qualification

1 full-time student band (>540 hours/year)

4 part-time student bands

Study hours count if relevant, planned and/or organised,

quality assured and timetabled


Understanding 16 18 funding

Understanding 16-18 funding

.

Document to read

“Update on the 16-19 funding formula review”

December 2012

28 pages

DFE website


16 18 education policy

16-18 education policy

16-18 Study programmes

GCSE Maths, GCSE English compulsory for those who lack them

A new 16-18 funding formula

Compulsory participation for 16 year olds in 2013

Education Funding Agency

New institutions (UTCs, 16-19 free schools etc)

Key Stage 5 Performance Tables

New A-levels taught from 2015

Consultation on 16-18 vocational qualifications due

Minimum standards for 16-18 provision (40% floor targets)

.


19 fe and skills policy

19+FE and skills policy

The “Department of Growth”

Big % of BIS budget spent on HE, Research

FE/Skills cut by 25% from 2011 to 2015

Freedom to use budget but budget falls

Various priorities in FE/Skills

Apprenticeships (for under 25s)

Those who are unemployed

Growth sectors


19 fe skills budget

19+ FE/Skills budget

SFA’s spending review cuts backloaded until loans start in 2013

+

Two year’s of underperformance

+

Top-slicing for Employer Ownership Pilots

+

A really tough allocation round in 2013-14

Source: AoC analysis of allocations and estimates


New sfa funding approach

New SFA funding approach

  • Single Adult Skills Budget

  • Simpler funding formula £ = (Rate + Disadvantage) * Area Cost

  • Rates based on credit value of qualifications

  • Same rules for apprenticeships/employer and adult provision

  • Funding still linked to qualifications

  • Simpler set of rules for learning support and learner support


Understanding sfa policy

Understanding SFA policy

Document to read

“Skills Funding Statement”

December 2012

24 pages (plus an annex)

BIS website

Due out soon

SFA funding system explanation

BIS skills statement in response to Heseltine & Richard review, plus info on Traineeships etc


24 advanced learner loans

24+ Advanced Learner Loans

Rules

Aged over 24, UK/EU resident, England-based study

SFA-approved provider

QCF Level 3+4, Access to HE, A-levels, Adv/Higher Apps

Anyone allowed up to 4 loans

Money

Loans – from £300 to £11,500

Apprenticeship loans at 50% of maximum rate

Repaid at 9% of income over £21,000 following completion

Processing loans

Online application to SLC from April 2013

College confirms enrolment/attendance/course details

Equal monthly payments which stop if student withdraws


Loans 1 setting fees

Loans - (1) setting fees

Pricing rules

Colleges able to set own fees (SFA rates are not a price list)

Little useful pricing data

Many 24+students & apprentices pay nothing at moment

Low public awareness

Some positives – remove up-front fees, no “firstness” rules

Some tips

Focus on maximising Fees * Group size * Retention

Calculate impact on rest of the College’s L3 and L4 provision

Prepare to be transparent about costs


Loans 2 advice to students

Loans – (2) advice to students

Responsibilities to students and employers

Loans not a regulated product but....

Important not to sell loans

Help students make decisions – accuracy, fairness, listening

Separate duties and disclose interests

Information students will want to know

Course costs (all of them)

Loan details (eligibility, process, timescale, t&c’s, repayment)

Alternatives (if they pay fee in full, other grants or loans)

NIACE “Protecting the student during and after the

implementation of 24+ Advanced Learner Loans”


High cost pupils

High cost pupils

Policy

Overhaul of assessment of Special Education Needs

Ofsted (2010) and NAO (2011) critical of 16+ arrangements

DFE decision to hand £600 mil budget to Councils

Three different funding approaches merged into one

Implementation

Little time to agree budgets/numbers

EFA’s 2013-14 spending is increasing but so is demand

Quick and complex reform

Students need to have Learning Difficulty Assessments (LDA)


Learner support

Learner support

  • Areas where there are cuts

  • Education Maintenance Allowances (£500+mil) ended

    Councils reducing support for transport

    Tax credit cuts, benefit caps, housing benefit changes

    Some budgets, relatively protected

    Bursaries (£180 mil) and Care to Learn (£30 mil) here for a while

    19+ Financial Support Budget (£160 mil rising to £200 mil)

    Higher ed maintenance grants (£1.5 mil), Bursaries, HE loans etc

    Some policy challenges

    Fewer rules, decision-making delegated to Colleges

    Greater student and family need


Policy funding

Policy & funding....

Economic stagnation + Politics = Constant policy changes

Some continuing themes (eg standards, tackling unemployment)

Annual public spending cuts for next 5 years (to 2017-18) driven by long-term trends with very real threat in 2015-16 (Year 3)

Competition, complexity and speed are unavoidable

Opportunities remain for Colleges who are nimble

Best to do things well or not at all


Implications for managers

...implications for managers

Resilience

Ability to work with people inside and outside organisation

Intelligence – working out what on earth is going on

  • Judgement

    Efficiency/Task completion/Maximum effect for minimal resources

    Speed – no time for procrastination

    A positive attitude needed


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