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Learner-responsive and employer-responsive funding "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 Director of Planning and Performance 4 December 2008 Workshop agenda 10.00 Welcome and introductions 10.15 Context and summary of changes 11.00 Learner-responsive funding (16-18 and 19+) 12.30 Lunch 13.15 Employer-responsive funding – Train to Gain 14.30 Coffee 14.45 Employer-responsive funding – Apprenticeships 15.30 Closing remarks 16.00 End CONTEXT AND SUMMARY OF CHANGES The context - 14-19 funding (DCSF) Legislation planned to enable: • LSC funding role given to Local Authority (Lewisham Council) • Compulsion to stay in education or continue training until 18 But policies to encourage participation being put in place now: • Phased introduction of new Diplomas from 08/09 • September Guarantee and entitlement to an Apprenticeship • Expansion of Young, Pre, and Programme-led Apprenticeships Most 16-18 growth planned in apprenticeships from 09/10: 660 655 238 664 666 260 240 16-18 FE Full Time Learners ’000 (+2% in England) 281 16-18 Apprenticeships ’000 (+18% in England) 2007/08 2008/09 2009/10 Source: LSC Grant Letter 2008/09 2010/11 The context - adult funding (DIUS) The following graph is from page 26 of the Annual Statement of Priorities Projected expansion of demand-led funding between 2005-06 and 2014-15 in England Funding including inflation (£ millions) 4,000 3,500 3,000 2,500 Train to Gain 2,000 1,500 Individual-responsive (excl. Skills Accounts) 1,000 500 Skills Accounts Learners with learning difficulties and/or disabilities Adult Safeguarded Learning 0 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 Academic Year Note projected dominance of Train to Gain and Skills Accounts by 2014 but more cautious than proposals in Leitch Review of Skills Summary of changes - new funding models 2007/08 School 6th Forms 2008/09 16-18 model Entry to Employment Further Education Apprenticeships* Train to Gain * 16-18 apprenticeships planned and budgeted in 16-18 model (DCSF) Adult learnerresponsive model Employerresponsive model Summary of changes - new funding formula New ‘demand-led funding formula’ for FE, WBL and TtG Introduction of: Standard Learner Numbers (SLN) There will be winners and losers, as shown in this LSC graph for 16-18 funding National rates based on affordability this x this Provider factor x this ALS allocated on a formula + this =£ Will get 2.1% real terms protection 4.2% in cash terms Will get 2.1% real terms protection Learner-responsive funding The demand-led funding formula Simple at first glance More complex in reality Standard Learner Number (SLN) x SLN could be listed or unlisted and has maximum per learner x £/SLN may be subject to transitional protection x PF has up to six elements, based on history + ALS allocations will include formula and negotiation element = Total funding has a cap National Funding Rate (£/SLN) x Provider Factor (PF) + Additional Learning Support (ALS) = Total funding Oh, and three census dates replaced by minimum attendance The Standard Learner Number SLNs are a new volume measure, replacing loadbanded and listed unweighted National Base Rates (NBRs). If they are listed the SLN value can be found within the Learning Aims Database (LAD). This may be expressed as an SLN GLH value. If SLN is not listed in the LAD then the SLN = glh (A32) divided by 450 For example: A full time NVQ in Beauty has an unweighted listed National Base Rate of £3,052 in 07/08. This is 520 SLN glh or 1.1556 SLN (listed) in 08/09 A full time Cert in Literacy in 450glh has an unweighted loadbanded NBR of £2,641 in 07/08. This would become 1 SLN (unlisted) in 08/09. If 460 glh it would become 1.0222 SLN. The Standard Learner Number SLN GLH for 16-18 and adult responsive funding are in the LAD http://providers.lsc.gov.uk/LAD/ NVQ example Basic skills example Listed Unlisted Unlisted SLNs in more detail SLNs (divisor) 08/09 Watch out for part time Access to HE and part time onsite NVQs NBR (loadbands) 07/08 They will now be unlisted (SLN based on glh in A32) Full Time (1 FTE and 1.2222 SLN) Part Time (0.5 FTE and 0.5 SLN) Full Time (1 FTE and 1 SLN) Guided Learning Hours Listed SLNs, the cap and rate changes Like now, where the QCA have recommended and/or LSC have identified a common duration for a course, a fixed rate is set in the LAD SLN values per enrolment are added together, but cannot exceed the 1.75 SLN per year cap (incl. entitlement if appropriate) Example for one learner in one year 5 AS levels Entitlement One key skill = 1.6667 SLN = 0.2533 SLN = 0.08 SLN = 2 SLN But this exceeds 1.75 per year cap, so this learner SLN is in fact 1.75 The SLN or SLN GLH 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) How many SLNs for these learners? Taught during the day and all start in Sept ’08 and achieve in July ‘09 4 Applied AS in 190glh each Listed 180 SLN GLH 1 Key skill in 30glh Listed 36 SLN GLH 4 AS levels in 140glh each Listed 150 SLN GLH 1 Key skill in 30glh Listed 36 SLN GLH Cert in nums in 450glh Unlisted Cert in literacy in 225glh Unlisted 4 AS levels in 140glh each Listed 150 SLN GLH 1 Key skill in 36glh Listed 36 SLN GLH Entitlement Listed 114 SLN GLH 4 AS levels in 140glh each Listed 150 SLN GLH 1 Basic Skill in 90glh Unlisted Entitlement Listed 114 SLN GLH = 1.68 SLN = 1.4 SLN = 1.5 SLN = 1.67 SLN = 1.75 SLN 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 Duration Minimum attendance 24 weeks or more 6 weeks 2 to 24 weeks 2 weeks Less than 2 weeks Once If an enrolment meets the minimum attendance criteria the SLN value assigned in the given academic year will be counted Resits and transfers do not generate an SLN value The National Funding Rate per SLN The LSC set fully-funded £ per SLN each year, and in 08/09 they are: • School Sixth Forms • 16-18 FE • Adult Learner Responsive £2,945 £2,860 £2,775 Things to note: • If transitional protection is required a provider rate will be applied • Rates are set based on affordability, not inflation (e.g. 2.1% for 16-18) • A reduced co-funded rate is applied for fee payers • The co-funded rate will fall as fee % increases to 50% by 2010/11 The Provider Factor SLN x NFR now needs to be multiplied by a provider factor The provider factor is calculated annually in advance for allocations (based on 8 Feb ILR F05 for FE and ILR W13 for WBL/TtG) Each funding model has its own provider factor Provider factor (e.g. 1.335) = Area Cost (e.g. 1.200) x Disadvantage (e.g. 1.079) x Programme weighting (e.g. 1.217) x Short-programme modifier (e.g. 1.001) x Success factor (e.g. 0.846) The Provider Factor Providers can see ‘indicative’ Provider Factors for each model in PaMS 1.335 Provider factor (example for 16-18 provider) The funding earned! So a 16-18 year old enrolment in a college might earn: 1.75 SLN x £2,860 NFR x 1.335 PF = £6,681.68 With this knowledge, how much funding for this learner? Full time onsite NVQ (540glh) Listed 520 SLN GLH Key skills in Nums (40glh) Listed 36 SLN GLH Key skills in Comms (45glh) Listed 36 SLN GLH Entitlement Listed 114 SLN GLH 1.57 SLN x £2,860 NFR x 1.335 PF = £5,990 And this adult learner in a college with 1.411 PF? Non-accredited creative writing in 90glh Unlisted 0.2 SLN x £2,775 NFR x 1.411 PF = £783 Additional Learning Support The demand-led funding formula does of course also include ALS SLN x NFR x PF + ALS = Funding ALS will be allocated as now, in advance and at provider level. However, in 2008/09 60% of the allocation will be driven by a formula and the remaining 40% will be negotiated (75/25 in 09/10) In the 16-18 model the formula is based on English and Maths point scores, and in the adult model it is based on the 06/07 level of study ALS claims in excess of £5,500 per learner remain as at present Adult fee element and the co-funded rate Adult learner responsive fee element is now nearly double 04/05 level Academic year 2004/05 2005/06 2006/07 2007/08 2008/09 £2,394 £2,513 £2,576 £2,640 £2,775 Fee element % 25% 27.5% 32.5% 37.5% 42.5% Fee element £ £599 £691 £837 £990 £1,179 Annual increase % 15% 21% 18% 19% Annual increase £ £93 £146 £153 £189 Increase on 2004/05 15% 40% 65% 97% Unweighted 450 glh base rate Train to Gain assumed fees are 42.5% of total (weighted) funding whilst each Apprenticeship element has a fee % listed on the LAD Plan is for fee element of 47.5% in 09/10 and 50% in 10/11 ALR co-funded rate = NFR – (NFR x Fee Element / PF) 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 £1,939 = £2775 - (£2,775 x 42.5% / 1.411) • Fully-funded NFR is £2,775 • Adult responsive Provider Factor is 1.411 • £1m for Additional Learning Support 1,600 SLN x £1,939 NFR x 1.411 PF = £4,377,486 co-funded 3,600 SLN x £2,775 NFR x 1.411 PF = £14,095,890 fully funded Total assumed learner fees at 42.5%? 1600 SLN x £2,775 x 0.425 = £1,887,000 + £1,000,000 ALS = £19,473,376 Employer-responsive funding Employer-responsive funding Apprenticeships (WBL incl. 16-18) Train to Gain (e.g NVQ 2 & SfL) FE mainstream (adult NVQs in workplace) Employer responsive model 2008/09 16-18 Apprenticeships £677m (+ 7.1%) Adult (19+) apprenticeships Workplace FL1/2/3/4 (e.g. NVQ) and SfL £330.2m (+ 4.5%) £907m (+ 55.5%) Apprenticeships Train to Gain £1007.2m (+ 6.2%) £907m (+ 55.5%) Train to Gain funding Train to Gain Standard Learner Numbers SLN x NFR x PW x ACU x TtG uplift = Funding All TtG Standard Learner Number (SLN) Values are ‘listed’ on the Learning Aim Database: http://providers.lsc.gov.uk/LAD/ The TtG SLN rates are derived from ‘Activity Costs’ research undertaken by the LSC, and for 2008/09 are as follows: TtG qualification SLN Value Higher Lower Full Level 2 (e.g. NVQ) 0.429 0.286 Full Level 3 (e.g. NVQ) 0.644 0.429 Numeracy and Literacy 0.18 ESOL 0.18 To claim the higher rate the provider must deliver ‘a minimum of 15 hours of eligible support/learning/training consisting of underpinning knowledge and understanding.’ Para 529 LSC PR&R Train to Gain National Funding Rate SLN x NFR x PW x ACU x TtG uplift = Funding The TtG National Funding Rate (NFR) for all providers in 2008/09 is: £2,775 SLN x NFR = unweighted funding TtG qualification SLN Value NFR Unweighted funding Higher Lower Higher Lower Full Level 2 (e.g. NVQ) 0.429 0.286 £1,190 £794 Full Level 3 (e.g. NVQ) 0.644 0.429 £1,787 £1,190 Multiplied by £2,775 Numeracy and Literacy 0.180 £500 ESOL 0.180 £500 Train to Gain Programme Weightings SLN x NFR x PW x ACU x TtG uplift = Funding The Train to Gain Programme Weightings (PW) are uplifts which fund additional costs associated with the vocational sector. The PWs are listed for each learning aim on the LAD. There are three Train to Gain PWs: TtG PWs Sector Subject Areas (SSAs) 1.00 (A) IT Users, Retail, Commercial Enterprise, Hospitality, Leisure, Travel, Tourism, Business, Administration and Law 1.25 (J) Health, Public Services, Care, Agriculture, Horticulture, Animal Care, IT Practitioners, Hair and Beauty 1.50 (K) Engineering, Manufacturing Technologies, Construction, Planning and Built Environment, Transportation, Literacy, Numeracy and ESOL e.g. 0.429 SLN x £2,775 NFR x 1.25 PW = £1,488.09 Train to Gain Area-costs uplift SLN x NFR x PW x ACU x TtG uplift = Funding The area-costs uplift (ACU) is in essence a London weighting and rises to a 20% increase for 15 of the most central London boroughs (with the remaining boroughs receiving a 12% uplift). However, other areas in the South East also receive uplifts from 12% to 1%. For both Train to Gain and Apprenticeships the ACU is no longer determined by the provider location. In 2008/09 it will be determined by the delivery location – that is, employer premises. e.g. 0.429 SLN x £2,775 NFR x 1.25 PW x 1.20 ACU = £1,785.71 Train to Gain Uplift SLN x NFR x PW x ACU x TtG uplift = Funding In June 2008 the LSC announced: ‘To help stimulate provider engagement with Train to Gain and their capacity to deliver the service, we will increase the base funding rates by an additional 3% in each of the next 3 years, over and above the previously planned 1.5% per annum increase in rates’ This is applied as an addition uplift within the formula: SLN x NFR x PW x ACU x TtG uplift = Funding e.g. 0.429 x £2,775 x 1.25 x 1.20 x 1.03 = £1,839.28 e.g. NVQ 2 in Health (10049873) high rate in Central London Train to Gain worked examples SLN x NFR x PW x ACU x TtG uplift = Funding NVQ in Health, Level 2 (low rate) in central London NVQ in Health, Level 2 (low rate) in Bristol SLN 0.286 SLN 0.286 NFR £2,775 NFR £2,775 PW 1.25 (J) PW 1.25 (J) ACU 1.20 ACU 1.00 TtG Uplift 1.03 TtG Uplift 1.03 Funding £1,226.19 Funding £1,021.82 Train to Gain worked examples SLN x NFR x PW x ACU x TtG uplift = Funding NVQ in Business, Level 2 (high rate) in central London Literacy, Level 1 in Bristol SLN 0.429 SLN 0.180 NFR £2,775 NFR £2,775 PW 1.00 (A) PW 1.50 (K) ACU 1.20 ACU 1.00 TtG Uplift 1.03 TtG Uplift 1.03 Funding £1,471.43 Funding £771.73 Train to Gain co-funding SLN x NFR x PW x ACU x TtG uplift x 0.575 = co-funding Level 3 learners are fullyfunded if they are Level 2 ‘jumpers’ or first full level 3 learners under 25 years of age NVQ in Construction, Level 3 (high rate) in central London SLN 0.644 NFR £2,775 All other Level 3 learners PW (incl. ESOL at every level) are co-funded. This means weighted ACU funding is reduced by 42.5% in 08/09 (rising to 50% by 10/11) TtG Uplift Simply multiply full-funding by 0.575 to calculate co-funding 1.5 (K) 1.20 1.03 Fully-funded £3,313.28 Co-funded £1,905.14 When do Train to Gain SLNs count? This is commonly referred to as the definition of a start Train to Gain and Apprenticeship rules now mirror those being used in the learner-responsive models Duration Minimum attendance 24 weeks or more 6 weeks 2 to 24 weeks 2 weeks Less than 2 weeks Once If an enrolment meets the minimum attendance criteria the SLN value assigned in the given academic year will be counted Train to Gain monthly instalments Monthly instalments paid, with last day of the month as census (trigger) Funding claim sent 4th working day, instalment paid 10th working day First two months paid in first instalment using an ‘n+1’ approach e.g. £600 over 5 months would lead to £200 installment in first month and £100 installments per month for the remaining four months But, 25% is held back for achievement Example £1,190 paid for a five month Train to Gain enrolment: Dec Installment £0 £200 Jan Inst. £400 Feb Inst. Mar Inst. £600 Apr Inst. £800 May Achievement £1,000 £1,200 Train to Gain Payment Profile – worked example NVQ in Beauty Therapy, Level 3 (low rate) in Manchester Co-funded installments SLN 0.429 Month 1 £220.33 NFR £2,775 Month 2 £110.17 PW 1.25 (J) Month 3 £110.17 ACU 1.00 Month 4 £110.17 TtG Uplift 1.03 Month 5 £110.17 Achievement £220.33 Total funding £881.32 Fully-funded Co-funded £1,532.74 £881.32 Train to Gain – additional flexibilities In July 2008 the LSC published details regarding ‘additional flexibilities’ • New high rate threshold (15 hours) • 3% uplift year on year • Skills for Life eligible at any level • Colleges doing NVQ 1s to be fully funded at Level 2 rates • Up to 30% ‘additional’ (non-first) full level 2s permitted • All Level 2s (incl. non-first) to be fully funded • Up to 20% ‘additional’ (non-first) full level 3s permitted • Level 3 Entitlement to apply to Train to Gain • Colleges with Level 4 and 5 NVQs can negotiate to continue them In October 2008 DIUS announced further flexibilities for ‘bite-sized’ learning, but don’t expect details until January. Apprenticeship funding Apprenticeship ‘blueprint’ Competence A National Vocational Qualification (NVQ) with assessment methods designed to test competence Knowledge Some frameworks have a technical certificate whilst others demonstrate knowledge within the NVQ element Apprenticeship Framework Employment Rights and Responsibilities This element is often covered as part of the NVQ or technical certificate Transferable, or ‘key’, skills Frameworks include as a minimum, Key Skills in Communication and Application of Number Apprenticeship qualifications on the LAD http://providers.lsc.gov.uk/LAD/ Frameworks Tab Apprenticeship rates on the LAD Employer Responsive Tab SLN Value Fee element percentage Programme weighting Apprenticeship National Funding Rates SLN x NFR x PW x ACU x DU = Funding Example - Construction Apprenticeship rates on LAD Framework elements SLN Value Programme Weighting Fee Element NVQ 2 in Construction Operations 1.064 1.50 (K) 40.8% Construction Award (Tech Cert) 0.978 1.30(C) 40.8% Key Skills in Communication 0.08 1.00 (A) 17.5% Key Skills in Application of Number 0.08 1.00 (A) 17.5% This now needs to be applied to the full formula, incorporating the National Funding Rate, Area-cost uplift and Disadvantage uplift Apprenticeship National Funding Rates SLN x NFR x PW x ACU x DU = Funding National Funding Rate: • £2,860 for 16-18 year olds • £2,775 for 19+ year olds Area-cost uplift: • Maximum of 1.2 (+ 20%) in central London • Based on delivery postcode as per TtG Disadvantage uplift: • Maximum of 1.32 (32%) additional funding • Based on learner home postcode Apprenticeship Funding - example SLN x NFR x PW x ACU x DU = Funding Construction Apprenticeship for 16-18 in central London with DU of 1.0811 Framework elements SLN NFR PW ACU DU NVQ 2* 1.064 £2,860 1.50 (K) 1.20 1.0811 £5,922 Tech Cert 0.978 £2,860 1.30(C) 1.20 1.0811 £4,717 Key Skills 0.08 £2,860 1.00 (A) 1.20 1.0811 £297 Key Skills 0.08 £2,860 1.00 (A) 1.20 1.0811 £297 Total * Includes funding for Apprenticeship Element Funding £11,233 Apprenticeship Funding - example SLN x NFR x PW x ACU x DU = Funding Construction Apprenticeship for 19+ in central London with DU of 1.0811 Framework elements SLN ACU DU Fee element NVQ 2* 1.064 £2,775 1.50 (K) 1.20 1.0811 40.8% £3,401 Tech Cert 0.978 £2,775 1.30(C) 1.20 1.0811 40.8% £2,710 Key Skills 0.08 £2,775 1.00 (A) 1.20 1.0811 17.5% £238 Key Skills 0.08 £2,775 1.00 (A) 1.20 1.0811 17.5% £238 NFR PW Total * Includes funding for Apprenticeship Element Funding £6,586 Apprenticeship Funding - worksheet SLN x NFR x PW x ACU x DU = Funding Construction Apprenticeship for 16-18 in Bristol (DU of 1.0000) Framework elements SLN NFR PW ACU DU Funding NVQ 3* 0.986 £2,860 1.50 (K) 1.00 1.0000 £4,230 Tech Cert (ACA) 0.556 £2,860 1.30(C) 1.00 1.0000 £2,067 Key Skills 0.08 £2,860 1.00 (A) 1.00 1.0000 £229 Key Skills 0.08 £2,860 1.00 (A) 1.00 1.0000 £229 Total * Includes funding for Apprenticeship Element £6,755 Apprenticeship Funding - worksheet SLN x NFR x PW x ACU x DU = Funding Construction Apprenticeship for 19+ in Bristol (DU of 1.0000) Framework elements SLN DU Fee element Funding NVQ 3* 0.986 £2,775 1.50 (K) 1.00 1.0000 48.5% £2,114 Tech Cert 0.556 £2,775 1.30(C) 1.00 1.0000 40.8% £1,187 Key Skills 0.08 1.0000 17.5% £183 Key Skills 0.08 1.0000 17.5% £183 NFR PW ACU £2,775 1.00 (A) 1.00 £2,775 1.00 (A) 1.00 Total * Includes funding for Apprenticeship Element £3,667 Apprenticeship monthly instalments Monthly instalments paid, with last day of the month as census (trigger) Funding claim sent 4th working day, instalment paid 10th working day First two months paid in first instalment using an ‘n+1’ approach e.g. £600 over 5 months would lead to £200 installment in first month and £100 installments per month for the remaining four months But, 25% is held back for achievement (only applied to NVQ and Framework SLN, and only paid when full framework is achieved) Funding claim made with TtG data as part of a single monthly ER Individualised Learner Record (ILR) data collection ILR uploaded online to the LSC Online Data Collections System Apprenticeship Funding - worksheet SLN x NFR x PW x ACU x DU = Funding Now calculate the monthly installments for a 3 month course Construction Apprenticeship for 19+ in Bristol (DU of 1.0000) Framework elements SLN DU Fee element Funding NVQ 3* 0.986 £2,775 1.50 (K) 1.00 1.0000 48.5% £2,114 Tech Cert 0.556 £2,775 1.30(C) 1.00 1.0000 40.8% £1,187 Key Skills 0.08 1.0000 17.5% £183 Key Skills 0.08 1.0000 17.5% £183 NFR PW ACU £2,775 1.00 (A) 1.00 £2,775 1.00 (A) 1.00 Total £3,667 Month 1 £1569.25 Achievement Month 2 £784.63 Total funding Month 3 £784.63 £528.50 £3,667 Closing remarks The priorities and targets The targets tend to relate to the Public Service Agreements (PSAs) as listed within the CSR and DCSF/DIUS Grant Letter to the LSC • Numeracy from Entry 3 (SfL) • Literacy (including ESOL) now from Level 1 (SfL) • Full Level 2 • Full Level 3 • Level 4 added To achieve targets there must be a switch from non-priority provision. This has been termed ‘developmental learning’ (previously ‘other’ or ‘residual’), with planned falls from £508m in 2008/09 to £116m in 2010/11 (excluding FLT) Funding optimisation revisited 1. Check and monitor the learning aims 2. Set appropriate course durations 3. Recruit and retain sufficient group sizes 4. Maintain high success rates 5. Regularly check the validity of the data “it is expected that providers will fully comply with the spirit and intention of the funding principles”. The official reading material LSC Funding Guidance 2008/09 (six ‘booklets’ totalling 320 pages) > Funding Rates Pages 350 > Principals Rules and Regulations 300 250 > Learner Eligibility 200 > Funding Formula 150 100 > ILR Funding Claims and Audit Returns 50 > ILR Funding Compliance Advice and Audit Guidance 0 The unofficial reading material The hands-on guide to post-16 funding I’ve written this as a reference tool, which should be useful (and even interesting!) for senior managers and governors to curriculum and data/MIS staff www.fundingguide.co.uk Let me know what you think! There are also free resources and more workshop dates on www.lewisham.ac.uk/pf THANK YOU and I hope you enjoyed the day