Transcript Slide 1

Survival guide to
16-18 year old LSC funding
Nick Linford
Director of Planning and Performance
3 June 2008
12.20 - 13.20
Hinckley Island Hotel
At the right seminar?
This seminar considers aspects of 16-18 year old funding for 2008/09
As we know, the FE funding methodology and formula has changed
www.lsc.gov.uk
“The move to a demand-led funding system in 2008/09 signifies
a wholesale step change for the learning and skills sector.
Demand-led funding means that further education will not exist as a
funding stream in 2008/09
From 2008/09 the LSC will fund provision through three main funding
models: 16-18, Adult Learner Responsive, Employer Responsive.”
In the next hour I will first introduce the funding and new formula, and
then look at some of the more interesting aspects of the methodology
Contents
This presentation on 16-18 funding comes in three parts:
1. Introduction to:
• The 16-18 funding and model
• The new national funding formula
• Example 16-18 year old learner funding
2. The interesting stuff • Why a low funding rate is good news
not in The Guidance: • Decimal-led funding
• Rising ratios inevitable?
• Know your learner apples from pears
3. Final thoughts, questions and discussion
Note: 16-18 Apprenticeship funding is planned and budgeted from
the 16-18 model, but payments are via the employer responsive model.
Therefore, Apprenticeship funding will be covered tomorrow during the
adult and employer responsive funding seminar (10.05 in this room).
The 16-18 funding and model
Funding from the Department for Children, Schools and Families (DCSF):
2007/08
Funding type
2008/09
Shift
£3,046
Further Education (FE)
£3,300
+ 8%
£2,053
School Sixth Form (SSF)
£2,108
+ 3%
£198
Entry to Employment (E2E)
£185
- 7%
£5,297
Total funding (£ million)
£5,593
+ 6%
Source: LSC grant letter 2008-09
FE
FE
SSF
E2E
E2E
Three different funding
streams in 2007/08
SSF
One 16-18 funding
model in 2008/09
The new national funding formula
Simple at first glance
Standard Learner Number (SLN)
x
National Funding Rate (£/SLN)
x
Provider Factor (PF)
+
Additional Learning Support (ALS)
=
Total funding
But take a closer look
SLNs come listed and unlisted
with 1.75 learner cap per year
x
£/SLN may be subject to
transitional protection
x
The 16-18 PF has six elements
which are based on historical
performance from 2006/07
+
ALS allocations will include formula
and negotiation element
=
Total funding is capped
Example 16-18 year old learner funding
First year A-level learner (just within the 1.75 SLN per learner cap)
Sep ’08 - Jul ’09 daytime
SLN GLH
SLN
AS Economics
150
0.3r
AS History
150
AS Politics
150
AS English
150
AS General Studies
36
Key Skill in Numeracy
36
0.08
Entitlement (incl. tutorial)
114
0.253r
Total
786
SLN
SLN GLH
divided
by 450 to
convert
into SLN
/ 450 =
0.3r
0.3r
0.3r
0.08
1.746r
x National Funding Rate x Provider Factor = Funding
1.746r x
£2,860
x
1.123
= £5,610
Why a low funding rate is good news
The new funding formula and qualification rates create winners and losers
The LSC protect funding by giving big winners and losers ‘transitional rates’
(owing to new formula and rates)
% change in funding
+10%
Winners given a transitional
rate lower than £2,860. Unless
SLNs changed, up to 4.2%
more funding is allocated
+7.5%
+5%
+2.5%
Within +/- 2.1% so the £2,860
National Funding Rate is given
0%
-2.5%
Losers given a transitional rate
higher than £2,860. Unless
SLNs changed, up to 4.2%
less funding is allocated
-5%
-7.5%
-10%
1
51
101
151
201
Colleges (indicative values)
Decimal-led funding
SLN rate for an AS-level with 150 SLN GLH?
Extra funding per
SLN decimal
0.3, 0.33, 0.333, 0.3333, 0.33333 or 0.333333?
2 £171,600
Of course all of these are correct, yet all generate
a different funding value once multiplied by £2,860
The A-level programme from the previous slide with
SLNs to one decimal place would generate an
unweighted £9,724,000 for 2,000 learners. This
graph shows the extra funding per SLN decimal place.
In addition, the number of decimal places used for
the provider factor has a similar impact
This may make matching LSC funding reports difficult!
SLN decimal places
The new formula relies on choosing the decimal place
3 £257,400
4 £265,980
5 £266,838
6 £266,924
7 £266,932
8 £266,933
Rising ratios inevitable?
The SLN per learner ratio is important to the LSC, as the higher the
ratio the more it costs them to fund the same number of learners
“to offer opportunities for as many learners as possible
we need to control unit cost increases, including those
arising from the expansion of learners’ programmes’
Source: LSC Statement of Priorities 2008/09 – 2010/11
The LSC will probably cap the ratio when setting allocations and targets
But, with the fall in part-time learners (as a result of the big cut in short
courses for adults?) an SLN ratio rise seems inevitable for GFE colleges
LSC projection (’000)*
2008/09
2009/10
2010/11
SLN ratio**
16-18 FT learners
660
664
666
1.5
16-18 PT learners
113
109
107
0.5
Total 16-18 learners
773
773
773
1.354
1.359
1.362
SLN per learner ratio
*Source: LSC Statement of
Priorities 2008/09 – 2010/11
**Example SLN averages
Know your learner apples from pears
The tri-annual FE funding census dates (1 Oct, 1 Feb and 15 May)
have been replaced by annual minimum attendance periods.
Duration
Minimum attendance
24 weeks or more
6 weeks
2 to 24 weeks
2 weeks
Less than 2 weeks
Once
The total annual SLN
value is earned unless
the withdrawal date
is before the minimum
attendance period.
This means there is a new ‘definition of a start’, so the learner
counting methodology has changed. Be careful not to compare
2007/08 apples with 2008/09 pears (esp. full time September starts).
Start
Withdrawals in October will no longer
generate funding nor count towards learner targets
Drop-out that count
Mid-Sept
Oct
Mid-Oct
Nov
Mid-Nov
Final thoughts
Compare LIS and DLC learner numbers – fewer FT and more PT in DLC?
Take this into account when setting and hitting participation targets.
Has you SLN per learner ratio risen between 06/07 and 07/08?
If so, find out why and discuss this with LSC when setting allocations.
Download free resources from www.lewisham.ac.uk/pf
Finally, keep an eye on these new abbreviations. Know what they are?
Questions and discussion
Survival guide to
adult and employer
responsive LSC funding
Nick Linford
Director of Planning and Performance
4 June 2008
10.05 - 11.05
Hinckley Island Hotel
At the right seminar?
This seminar considers adult learner and employer funding in 2008/09
The FE, WBL and TtG funding methodologies and formulas are changing
www.lsc.gov.uk
“The move to a demand-led funding system in 2008/09 signifies
a wholesale step change for the learning and skills sector.”
Demand-led funding means that further education will not exist as a
funding stream in 2008/09”
From 2008/09 the LSC will fund provision through three main funding
models: 16-18, Adult Learner Responsive, Employer Responsive.”
In the next hour I will first introduce the funding and new formula, and
then look at some of the more interesting aspects of the methodology
Contents
This presentation on adult funding comes in three parts:
1. Introduction to:
• The adult learner and employer funding models
• The new national funding formula
• Example adult learner responsive funding
• Example adult employer responsive funding
2. The interesting stuff • Key learner and employer model differences
not in The Guidance: • Tuition fees (unweighted and weighted)
• Rising ratios inevitable?
• Employer model monthly instalments
3. Final thoughts, questions and discussion
Note: 16-18 Apprenticeship funding is planned and budgeted from
the 16-18 model, but payments are via the employer responsive model.
Adult learner and employer funding models
Graph on page 26 of the LSC Annual Statement of Priorities 08/09 – 10/11
Projected expansion of adult demand-led funding
Funding including inflation (£ millions)
4,000
Adult
employer
responsive
model
3,500
3,000
2,500
Train to Gain
2,000
1,500
Adult FE funding
1,000
(excl. Skills Accounts & workplace
NVQs become Train to Gain)
500
Adult learner
responsive
model
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
The new national funding formula
Simple at first glance
Standard Learner Number (SLN)
x
National Funding Rate (£/SLN)
x
Provider Factor (PF)
+
Additional Learning Support (ALS)
=
Total funding
But take a closer look
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 (learner model)
or actual (employer model)
+
ALS allocations will include
formula and negotiation element
=
Total funding has a cap
Example adult learner responsive funding
Adult learner responsive example (fee remitted) using National Funding Rate (NFR)
Qualification
SLN GLH / 450 = SLN x NFR
x
PF
= Funding
Full time NVQ
520
1.15r
£2,775
1.321
£4,236
Cert in ESOL
45 (unlisted)
0.1
£2,775
1.321
£367
Adult learner responsive example (fee paying) using Co-Funded Rate (CFR)
£2,775 NFR - (£2,775 NFR x 42.5% Fee element / 1.321 PF) = £1,882 CFR
Qualification
SLN GLH / 450 = SLN x CFR
x
PF
= Funding
Full time NVQ
520
1.15r
£1,882
1.321
£2,873
Cert in ESOL
45 (unlisted)
0.1
£1,882
1.321
£249
Deduction is the fee element, which is 42.5% of the unweighted funding:
1.15r SLN x £2,775 NFR x 42.5% = £1,363 fee element deducted
0.1 SLN x £2,775 NFR x 42.5% = £118 fee element deducted
Example adult employer responsive funding
Adult employer responsive Apprenticeship funding example:
Retail Apprenticeship
SLN
x NFR
= Funding* - Fee element
Framework funding
0.759
£2,775
£2,106
% on LAD
NVQ 2 in Retail Skills
0.286
£2,775
£794
% on LAD
Cert in Retailing L2
0.3
£2,775
£833
% on LAD
Key Skills in Comms
0.08
£2,775
£222
% on LAD
Key Skills in Number
0.08
£2,775
£222
% on LAD
Total
1.505
£4,176
Adult employer responsive Train to Gain funding example (First Full Level 2)
Qualification
SLN
NVQ 2 Lower Rate
0.286
x
NFR
£2,775
=
Funding*
£2,171
* These examples are unweighted by elements of the provider factor
Key learner and employer model differences
16-18 and adult learner model
Historical Provider Factor with monthly
payments against agreed profile (mid and
year-end reconciliation for adults)
Employer responsive model
Historical Provider Factor used for
maximum contract value but monthly
instalments based on actual delivery
Retention and achievement funding
Achievement funding 25% for Train to
accounted for by the success factor within Gain and Apprenticeships.
the Provider Factor
(excl. Key Skills and Tech Cert)
Funding not reduced further if learner is
withdrawn after minimum attendance
Withdrawal may impact on funding as
payment based on monthly instalments
Transitional protection applied by giving a
rate higher or lower than the national rate
No transitional protection, except for
NVQs that were previously FE
Five programme weightings
Three programme weightings
Fee element = % of unweighted funding
Fee element = % of weighted funding
Annual per learner cap of 1.75 SLN
No per learner cap on funding
Funding claims submitted minimum five
times with 3 during year and 2 after
Monthly funding claims made to the LSC
every 4th working day of the month
Tuition fees (weighted and unweighted)
Adult learner responsive assumed fees now nearly double 04/05 level
Academic year
2004/05
2005/06
2006/07
2007/08
2008/09
Unweighted
450 glh base rate
£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%
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
Rising ratios inevitable
Adult learners
Your adult learners are probably falling even if your SLNs are increasing
2,500
2,000
1,500
1,000
500
0
2005/06
2006/07
2007/08
“the pattern of that learning will change. To meet our national priorities,
we need to shift the pattern so that we provide longer and more expensive
courses for adults. So while maintaining the overall volume of adult funding,
we estimate there will be a net reduction in publicly-funded places”
Source: LSC Grant Letter 2006/07
Therefore, the LSC should not be surprised by SLN per learner ratio
increases. Colleges should beware SLN ratio capping by the LSC.
Employer model monthly instalments
Monthly instalments paid, with last day of the month as census point
Funding claim 4th working day, instalment paid 10th working day
• First two months paid in first instalment
Train to Gain:
• 25% held back for achievement
• First two months paid in first month
Apprenticeships:
• Less than 25% held back for framework
achievement as KS & Tech Cert paid in full
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
Final thoughts
Compare LIS and DLC learner numbers – fewer FT and more PT in DLC?
Take this into account when setting and hitting participation targets
What impact will the new Train to Gain instalments have on funding
and timing of payments. Detailed profiles are vital for monitoring performance.
Download free resources from www.lewisham.ac.uk/pf
Finally, keep an eye on these new abbreviations. Know what they are?
Questions and discussion