Question to the Department for Education:

To ask the Secretary of State for Education, what steps he is taking to provide financial support to higher education establishments; what assessment he has made of the potential merits of (a) reviewing the Adult Education Budget (AEB) business case processes, (b) offering an income guarantee for colleges, (c) implementing a rate premium on priority courses and qualifications and (d) introducing a cost-increase sharing mechanism for his Department's approved capital projects.

Across the next three years, the department is investing almost £900 million of further funding into the higher education sector. This includes the largest increase in government funding in over a decade, to support students and teaching.

The department recognises the challenges providers have faced as a result of the COVID-19 pandemic. We also know that many providers have been able to continue to deliver provision successfully throughout the pandemic and now expect them to have had the time and opportunity to adjust their learning offers to accommodate online/flexible learning in response to further COVID-19 waves. That is why for the current academic year (2021/22) we plan to maintain the Education and Skills Funding Agency’s Adult Education Budget reconciliation threshold at 97%.

The department is committed to investing in 16-19 education, ensuring that further education (FE) is financially sustainable and we have taken several steps to increase funding and bolster the FE sector.

The 2021 Spending Review has made available an extra £1.6 billion for 16-19 education in the 2024/25 financial year compared with the 2021/22 financial year. This includes an up-front cash boost which will see the rate of funding per student increase by over 8% in the 2022/23 academic year.

The significant increase to the national funding rate and the other funding increases alongside this, demonstrates our commitment to 16-19 education and will help with college income.

The department has set out details of how the additional funding will be allocated in the 2022/23 academic year. Along with increasing the national rate of funding for a Band 5 student to £4,542, we are also increasing:

o the High Value Courses Premium from £400 to £600

o disadvantage Block 2 and the Block 1 for looked after children and care leaver rates from £480 to £504

o the programme cost weightings for five subject areas (medicine and dentistry, nursing and subjects and vocations allied to medicinen transportation operations and maintenance, building and construction and urban, rural, and regional planning), to better match the cost of delivery

The department also announced on 4 April 2022, the colleges that were successful in the FE Capital Transformation Fund bidding process. Each college has received a grant offer from the department. Most colleges will also be contributing match funding. It is for colleges to manage their condition improvement project within the budget available. We will monitor progress across all college projects.