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Further Education: Finance

Question for Department for Education

UIN 123627, tabled on 1 December 2020

To ask the Secretary of State for Education, what assessment he has made of the effect on college finances of the disproportionally low payment made by ESFA for 16-18 provision in March 2020, which leaves the sector under-funded by around 6% according to the Association of Colleges.

Answered on

9 December 2020

The existing payment profile is based on the academic year (August to July) and is based on historical analysis. It takes into consideration the higher costs faced by colleges early in the year, as well as varying profiles in other months. Currently, colleges receive payments that are higher than the flat profile in the autumn and lower monthly payments over the winter that lead to the ‘shortfall’ in the spring, as identified by the Association of Colleges.

We have no plans at this time to change the profile; it has been used for many years and is well understood by colleges. However, this academic year has seen a significant boost to levels of funding for 16-19 education. The government previously announced in August 2019 that it will invest an extra £400 million in 16-19 education in 2020-21. This is the largest injection of money in a single year since 2010 and represented an increase of 7% in overall 16-19 funding. The base rate of 16-19 funding has since increased by 4.7% this academic year 2020/21, from £4,000 to £4,188.