Question to the Department for Education:

To ask the Secretary of State for Education, what assessment he has made of the impact that the outbreak of covid-19 has had on the lagged funding mechanism used by the Education and Skills Funding Agency; and what impact that methodology has had on the Further Education sector.

The potential impact of the COVID-19 outbreak was taken into consideration when making some changes to the lagged funding mechanism for 16 to 19 education. When calculating 16 to 19 education funding allocations for 2021 to 2022, we applied an average retention factor for each provider, rather than using data from 2019 to 2020. Our intention was to provide a retention factor for 2021 to 2022 allocations that was not affected by the impact of the COVID-19 outbreak. In addition, we changed how we calculated exceptional in year Growth funding, making it more responsive to the increase in students from Autumn 2020. This helped providers with the costs of student number growth, in year.

The department also provided specific interventions to help young people in the circumstances of the COVID-19 outbreak. For example, we introduced the 16-19 Tuition Fund aimed at helping colleges and other providers to give prompt support to young people who needed it. It also designed a one year offer for 18- and 19-year-olds who were due to leave school or college in the summer of 2020. This funding helped providers to offer courses of up to one year duration in high value subjects to enable young people, who would otherwise have moved into apprenticeships or employment, to continue in education if work-based opportunities were not available to them.

In the academic year 2018/19, the total amount of 16 to 19 programme funding was £5,132 million, with an average funding per student of £4,504[1]. By the academic year 2021/22 the total amount 16 to 19 programme funding had increased to £5,881 million with an average funding per student of £4,994[1]. This followed an increase in funding rates paid for in the 2019 and 2020 spending rounds.

We are committed to investing in 16 to 19 education to ensure every young person has access to an excellent education, and to ensuring the further education sector can play its part in that and in developing adult skills, which requires it to be financially sustainable. The 2021 Spending Review has made available an extra £1.6 billion per year for 16-19 education in 2024-25 compared with financial year 2021-22. This will fully fund the additional students we anticipate in the system, pay for the increasing take-up of T Levels, maintain funding per student in real terms, and enable increased time in education for all 16 to 19 year-olds. The department will set out details of how this additional funding will be allocated in due course.

The Education and Skills Funding Agency will continue to work with further education and sixth form colleges to monitor and support their financial sustainability.

[1] This calculation is based on published allocations, taking the amount of Total Programme Funding allocated, divided by the total number of students in each academic year, at providers receiving programme funding. Some institutions receive only high needs funding, and their students are not included in this calculation.