2016 to 2017 funding allocations – positive news for the sector

The Skills Funding letter for 2016 to 2017 sets out our budget and priorities for the forthcoming spending review period. This year’s letter confirmed that the spending review settlement for the FE sector was positive. It also focused on apprenticeship growth, localisation of funding, simplification and stability.

We have now issued provider allocations for the 2016 to 2017 funding year, which includes:

  • maintaining contract values at 2015 to 2016 (as at January 2016) for the newly formed adult education budget
  • 19% increase on delivery over the 12 months from December 2014 to November 2015 for 19+ apprenticeships allocations
  • 3% increase on delivery over the 12 months from December 2014 to November 2015 for 16 to 18 apprenticeship allocations
  • 24% increase on delivery over the 12 months from December 2014 to November 2015 for SFA-funded 16 to 18 traineeship allocations
  • 29% increase on advanced learner loan facilities, from current commitments

How we have worked your allocations out

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We have made great progress, with the support of our stakeholders, in simplifying the funding system, so far we have:

  • begun work on preparing the sector for the devolution of the adult skills budget by publishing the Adult Education Budget: Changing Context and Arrangements for 2016 to 2017
  • enabled grant funded providers to use their adult education budget more freely and flexibly in line with local priorities by allocating these funds as a block grant
  • started to work with areas with devolution deals to help support their dialogue with their local providers about what will be delivered in 2016 to 2017
  • used a simple allocations methodology across all funding streams
  • reviewed and rationalised the way we present our funding rules documents, early feedback suggests that this has been well received by our providers – some 74% of respondents approved of the extent to which our funding rules have removed bureaucracy and simplified the funding system, which remains the same as last year
  • streamlined performance management arrangements for 2015 to 2016
  • we have given colleges and other training organisations more flexibility to respond to the needs of their local area, using eligible qualifications and/or their components or bespoke, locally designed or tailored training provision (for example, employability skills and confidence-building)

Over the next few years, we will be changing the basis of our allocation methodology in support of the government’s plans to devolve the adult education budget to local areas: this may result in changes to individual provider allocations over that period. Providers will need to plan for this. We are working with our Funding Reform and Localism Steering Group to develop proposals for how the allocations methodology will change.

In the funding statement and covering letter issued to providers with their funding allocation, we have signalled that apprenticeship allocations from April 2017 may be subject to change as new starts begin to come through the Digital Apprenticeship Service. It is important that providers factor this into their planning. More information on the apprenticeship levy operating model will be published in April.

We have recently opened applications for growth in line with performance point 2 in our performance management rules 2015 to 2016. We will also be publishing soon criteria for a targeted growth exercise on apprenticeships that we are going to run, ahead of the start of the 2016 to 2017 funding year (related to 2016 to 2017 allocations).

Should any providers wish to discuss their funding statement they should contact their Central Delivery Service Adviser.

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