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Income Generation Through Fees and Contributions . KEY MESSAGES . SECURING YOUR FUTURE THROUGH INCOME GENERATION Providers who have taken this opportunity are: Reaping financial rewards Attracting new learners and employers Driving up quality and value

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Income Generation Through Fees and Contributions

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Presentation Transcript
Income Generation
  • Through
  • Fees and Contributions
key messages

Providers who have taken this opportunity are:

      • Reaping financial rewards
      • Attracting new learners and employers
      • Driving up quality and value
      • Delivering real benefits for their community and employers
      • Increasing their independence
key messages to providers to support fees strategies
Key Messages to Providers to support Fees Strategies
  • Understand your customers – price and value
  • Understand your business – positioning in the market place
  • Understand your competitors – unique selling points, beating low fee competitors
  • Understand price sensitivity
  • Take action – adding value
policy background
Policy Background

Skills Strategy White Paper:- ‘21st Century Skills: Realising Our Potential’, DfES, July 2003

Foster Review:- ‘Realising the Potential: A Review of the future of further education colleges’, DfES, Sir Andrew Foster, November 2005

‘Priorities for Success 2006 – 2008’, LSC, October 2005

FE White Paper:- ‘Further Education: Raising Skills, Improving Life Chances’, DfES, March 2006

policy background 2
Policy Background 2
  • Leitch Review of Skills:- ‘Prosperity for All in the Global Economy –World Class Skills’, HM Treasury, Dec 2006
  • Leitch Implementation Plan:- ‘World Class Skills, Implementing the Leitch Review of Skills’, DIUS, July 2007
  • ‘Our Statement of Priorities: Better skills, Better jobs, Better lives’, LSC, November 2007
  • ‘Train to Gain Plan for Growth; November 2007 – July 2011’, LSC, 2007
policy background 3
Policy Background 3
  • In the 2009/10 joint Grant letter from DCSF and DIUS the commitment to fee and income generation was re-iterated: “the LSC must continue to support colleges and other providers to be more efficient in the way they generate and collect fee income from learners and employers who are expected to contribute towards the costs of learning.”
  • In the Statement of Priorities 2009/10 restated its commitment to ensuring that “colleges and other providers secure financial contributions towards the costs of learning from employers and learners.”
example of targets
Example of targets

EXAMPLE in 2011


10 learners (none are eligible for fee remission)

£100 course cost

50% theoretical fee income

College income = 10 * £100 * 50% = £500


60% of the theoretical fee is collected

College income = £500 * 60% = £300

  • Providers have the freedom to set fees on a course by course basis, according to:
          • Market conditions
          • Cost of provision
          • Levels of demand
  • Encourages providers to:
          • Ensure the highest quality provision
          • Focus upon value for money
          • Respond directly to market conditions
what has the lsc done to implement this agenda
What has the LSC done to implement this agenda?


  • Extensive provider and market research
  • Internal and external advisory groups


  • Co-funded Fee Target Setting Framework
  • Full cost fee income assessment of added value


  • Development and promotion of income generation toolkits and training in partnership with LSIS
  • Case studies of college and non-college providers
success stories
Success Stories

Providers are responding well to the challenge of increasing contributions from the learner and/or employer:

  • Co-funded fee collection increased by 7% from 2006/07 to 2007/08, averaging £540 collected per co-funded SLN, with the top quartile collecting over £1,000 per co-funded SLN.
  • Full cost fee income increased by 31% from 2006/07 to 2007/08. The added value generated by college providers through full cost income averaged 8% in 2007/08 with the highest performing providers achieving over 25%
the challenge faced
The Challenge Faced
  • The current economic situation and the national fee assumptions present challenges to providers:
  • If the target fee collection rate per co-funded SLN is to meet the national fee assumption by 2010/11 then the fees collected per co-funded SLN would need to increase from £540 in 2007/08 to £858 in 2010/11 (if action is not taken and current trends remain, we will not reach this rate until 2014)
  • To help you work towards these targets and address these challenges the LSC has ……….
set up advisory groups
Set up Advisory Groups
  • External Fees advisory Group
      • MEMBERS - AoC, NIACE, ALP, DIUS, LSIS (QIA), KPMG – World Class Skills, LSC representatives from Finance, TTG, Skills.
      • ROLE - advising on increasing the income of the FE sector, including target setting, promotion, marketing and communication of fee income generation
  • Regional Fees Champions
      • MEMBERS - Nominated via the Funding Planning and Performance Board and/or the Learning Planning and Performance Directors.
      • ROLE – Communication and advice on the implementation and delivery of the target setting framework
undertaken research
Undertaken Research

Published Research

  • 10 Case Studies across 2 publications on Income Generation  (all types of providers)
  • Who Gets Fee Remission 
  • Value of Learning in the Adult Market
  • The Impact of Fees Policies on Recruitment to LSC Funded Provision
  • Fees and Commercial Income - Good Practice and Other Key Issues


delivered training
Delivered Training
  • Income Generation workshops– practical solutions and implementation – AoC (delivered in 2008)
  • World Class Skills Income Generation
  • Specialist workshops on the tools for generating income
  • World Class Skills – Funding and Finance for Maximising Business – LSIS and KPMG
  • Specialist workshops on finance and consultancy support for providers – ongoing delivery
developed a web resource www lsc gov uk providers funding policy income generation
Developed a web