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Streamlined Funding System: A Guide to Simplification 2013/14

Learn about the new simplified funding system for supporting learners, including a single funding system and rates, and a streamlined approach. Get insights on funding and loan allocation.

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Streamlined Funding System: A Guide to Simplification 2013/14

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  1. Funding simplification 2013/14 Asif Mohammed October 2012

  2. Vision • Reduce number of budget lines • Reduce the number of funding rates • Simplify funding methodology • Streamline approach to supporting learners • Not for simplification sake

  3. The right balance Complexity Precision Simplification Rough justice

  4. The new simplified funding system Key features: • a single funding system • a simple funding formula • simplified funding rates • a single earnings methodology • a single payment process (depending on provider type) • streamlined support funding

  5. Now and then

  6. What, why and how FUNDING = RATE (X AREA COST) • Earnings methodology similar to current ER funding methodology – *20%* of rate is ‘reserved’ for achievement, remaining 80% is spread over the number of months planned for delivery • Most difference is for classroom learning, eg, removal of provider factor (which included programme weighting and success rate), no ‘unlisted’ rates • Rates changes for classroom and workplace learning due to new rates matrix • Cap still in place (a max per learner per year, equivalent to current 1.75 SLN)

  7. The new rates matrix(v2, June 2012)

  8. Work still in progress • Basic skills • Support funds (ALS, disadvantage, learner support) • Apprenticeship element (a premium on top of the individual rates for tech cert, NVQ and functional skills) in two parts: - fixed amount: same for every framework/every sector - variable amount: depending on framework length and programme weighting • ALS for 16-18 Apprenticeships • Large employers and 25+ Apprenticeships

  9. Timeline • Shadow funding calculations during 2012/13 • No changes in 2012/13 but providers have time to prepare • Final funding policy published January 2013 for 2013/14 • Agency also considering transitional support arrangements.

  10. Read the guidance Agency website > Providers > Funding Simplification • Last update June 2012 • Next update (end) October 2012 • Final final final everything sorted guidance due January 2013

  11. 24+ advanced learning loans – funding ‘allocations’ Asif Mohammed October 2012

  12. 24+ Advanced Learning Loans • Announced in Skills Investment Strategy 2010-11 and restated in New Challenges, New Chances, December 11. • Concentrating Government funding on areas where it can have the most impact, means there needs to be a greater shared responsibility for funding courses. • Government grant funding is focused on young people, those without basic skills and those below 24 and seeking work. • Public funding for 24 year olds and above on advanced level courses will be in the form of a loan via the Student Loans Company.

  13. 24+ Advanced Learning Loans • Loans will be available for learners aged 24 and above studying at Level 3 and above. • This represents between 10-15% of the total adult budget for FE and the vast majority will continue to be grant funded. • Without the introduction of loans – a reduction in learners. • Research commissioned on behalf of BIS – three quarters of learners asked say they would consider learning funded through a loan.

  14. Roles and Responsibilities

  15. Key dates coming up • 01 October: indicative funding statements being issued plus draft Funding Rules for Loans and FAQ • 7 October: guidance to relationship teams • October: dialogue with providers • 6 Nov: feedback on dialogue with providers • 14 December: final funding statements issued

  16. What is a loan allocation??! • Allocation known as a ‘facility’ • Notional amount based on current loans type delivery and current learner demand • Enables provider to plan BUT is not a guarantee... • Actual funding will depend on loans taken out by learners • £5k de minimis and need to consider providers currently without any Agency funded loans type delivery that might be planning it • Split Aug-Mar/Apr-Jul as with other allocations • Around 800 of 1,050 providers will get an allocation

  17. Agency role • Student Loans Company approves loans and pays funds to provider • SLC will approve eligible loans even if that takes provider above its allocation • Agency role to manage budget for providers (through a quarterly review process) • Agency will provide national monthly data for all providers to see collective draw-down against budget

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