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Page 1: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

DEMAND-LED FUNDING

THE FE FUNDING METHODOLOGY 2008-09

Presenter: Edward Drake

April 2008

_______________________________________________________ Drake Lane Associates Ltd. www.drakelane.co.uk Tel: 01756 797211 Email: [email protected]

Page 2: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

DEMAND-LED FUNDING - CONCEPTS

Activity is quantified in terms of “Standard Learner Numbers” (SLN’s)

Activity is funded within 3 discrete categories:

• 16-18 provision

• Adult learner-responsive provision

• Adult employer-responsive provision

LSC funding is increasingly directed toward ‘priority areas’

Each provider has “Provider Factors” which represent their individual profile and characteristics and are used to ‘weight’ SLN’s and therefore enhance funding

Page 3: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

DEMAND-LED FUNDING - CONCEPTS (continued)

Additional Learning Support (ALS) funding remains separate from all other LSC funding

Therefore ...

LSC Funding = ( SLN’s x Provider Factor x Funding Rate ) + ALS

Important note:Different Provider Factors and Funding Rates will apply for each of the 3 funding categories for each provider

SLN’s are subject to “Funding Rates” in order to convert them into actual funding

Page 4: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

KEY LSC FUNDING PRIORITY GROUPS

Adult learners with basic skills needs (Skills for Life)

Adult learners without a full level 2 qualification

16-18 year old learners on general FE programmes

Adult learners without a full level 3 qualification

Adult learners with skills needs at level 1 or below (Foundation Learning Tier)

Learners of all ages on Apprenticeships and Work Based Learning

Adult learners on employer-based NVQ programmes

Adult learners on Train to Gain programmes

Page 5: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

LSC FUNDING ‘BLOCKS’

3 discrete funding categories exist within Demand-Led Funding

16-18Adult

Employer-responsiveAdult

Learner-responsive

FE

E2E

FE

Apprenticeships

Train to Gain

FE

UfI/Learndirect

Note:The arrows above indicate projected movement (ie. increase or decrease) in funding between 2008-09 and 2010-11

Page 6: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

STANDARD LEARNER NUMBERS (SLNs)

SLN’s are calculated as follows:

SLN = annual GLH / 450

SLN calculations are capped at 1.75 SLN’s per learner

Most learning aims have a fixed (‘listed’) GLH

Where no such fixed (‘listed’) GLH exist then SLN’s are calculated based on planned GLH

‘Starts’ are defined as follows:

24+ weeks 6 week minimum retention period

2+ and < 24 weeks 2 week minimum retention period

< 2 weeks one attendance required

Page 7: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

EXAMPLES OF LISTED AIMS

Qualification Listed GLH

Key Skills qualifications (Communications, ICT, Number) 36 Functional skills qualifications (English, ICT, Maths) 36 NVQ (delivered entirely at the provider in 450+ glh) 520 Each additional NVQ unit 30 International Baccalaureate (Diploma) 1350 Access to HE (studied in 450+ glh) 520 EDEXCEL National Diploma (18 units) 1080 EDEXCEL National Certificate (12 units) 900 EDEXCEL National Award (6 units) 450 EDEXCEL level 1 Introductory Diploma (6 units) 450 EDEXCEL level 2 First Diploma (6 units) 450 OCR level 3 National Extended Diploma (18 units) 1080 OCR level 3 National Diploma (12 units) 900 OCR level 1, level 2 & level 3 National Certificate (6 units) 450

Note: The above values apply to the 16-18 and Adult LearnerResponsive models only

Page 8: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

FUNDING FOR NEW DIPLOMAS

Level 3 Advanced Diploma:

Diploma component ‘Listed’ GLH SLN

Principal learning 540 1.200 Extended project 120 0.267 Additional & specialist learning 360 0.800 Personal learning & thinking skills 60 0.133 Costs of collaboration 54 0.120

1134 2.520

Page 9: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

FUNDING FOR NEW DIPLOMAS (continued)

Level 3 Progression Diploma:

Diploma component ‘Listed’ GLH SLN

Principal learning 540 1.200 Extended project 120 0.267 Personal learning & thinking skills 60 0.133 Costs of collaboration 36 0.080

756 1.680

Page 10: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

FUNDING FOR NEW DIPLOMAS (continued)

Level 2 Higher Diploma:

Diploma component ‘Listed’ GLH SLN

Principal learning 420 0.933 Project 60 0.133 Functional skills - English 36 0.080 Functional skills - Maths 36 0.080 Additional & specialist learning 180 0.400 Personal learning & thinking skills 60 0.133 Costs of collaboration/work experience 40 0.089

832 1.849

Note: This example assumes that the learner has already attained Functional skills in ICT

Page 11: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

FUNDING FOR NEW DIPLOMAS (continued)

Level 1 Foundation Diploma:

Diploma component ‘Listed’ GLH SLN

Principal learning 240 0.533 Project 60 0.133 Functional skills - English 36 0.080 Functional skills - Maths 36 0.080 Functional skills - ICT 36 0.080 Additional & specialist learning 120 0.267 Personal learning & thinking skills 60 0.133 Costs of collaboration/work experience 30 0.067

618 1.373

Page 12: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

FUNDING FOR NEW DIPLOMAS (continued)

Programme weightings for the new Diplomas will be as follows:

Diploma line Programme Weighting Level 1 Level 2/3

Construction & the built environment 1.3 1.3 Creative & media 1.3 1.3 Engineering 1.3 1.3 Information technology 1.12 1.3 Society, health & development 1.12 1.12

Page 13: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

PROVIDER FACTOR

Five elements dictate the “Provider Factor” as follows:1. Average programme weighting - each provider has a single (annual) programme weighting (rather

than having this variable operating at individual aim level)

2. Average disadvantage weighting - each provider has a single (annual) disadvantage weighting (rather

than having this variable operating at individual learner level)

3. Area costs weighting - London (and surrounding area) providers continue to receive a

provider level uplift

4. Short programme modifier - each provider has a single (annual) short course modifier (rather

than having this variable operating at individual aim level)

5. Success factor - each provider has as a single (annual) success rate (rather than

having this variable operating at individual enrolment level)

Page 14: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

PROVIDER FACTOR (continued)

Different Provider Factors apply to each of the 3 funding categories (ie. 16-18, adult learner-responsive, adult employer-responsive)

Generally, Provider Factors are recalculated annually to reflect the most recent full-year’s data - however, the Provider Factor for the adult employer-responsive funding category is recalculated in-year based on actual data

Page 15: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

FUNDING RATES

The SLN Funding Rates for 2008-09 are:

School Sixth Forms £2,945

16-18 FE £2,860

16-18 Apprenticeships £2,860

Adult Learner Responsive £2,775

Employer Responsive (except 16-18 Apprenticeships) £2,775

Note: Actual Funding Rates applicable in 2008-09 will be subject to ‘Transitional Arrangements’

Page 16: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

FUNDING RATES (continued)

Provision which is (and learners who are) eligible for tuition fee remission is/are “Fully-funded” (ie. assuming that running costs are fully covered by LSC funding)

The Co-funded Rate is a function of the Fully funded Rate:

Co-funded rate = fully funded rate - fee element

Fee element = (fully funded rate x fee percentage) / provider

factor

Fee percentage = 42.5% (in 2008-09)

Provision which is (and learners who are) not eligible for tuition fee remission is/are “Co-funded” (ie. assuming that running costs are

covered by a balance of LSC funding and tuition fee income)

The difference between “Fully-funded” and “Co-funded” is reflected in the respective Funding Rate to be applied

Page 17: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

DEMAND-LED FUNDING - FRAMEWORK

LearningAimsidentifies

Learning Aims Database

LSC Fundingconvert to

SLN’s

quantifiedin terms of

SLN’s - standard learner numbers

via Provider Factor

Page 18: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

_______________________________________________________ Drake Lane Associates Ltd. www.drakelane.co.uk Tel: 01756 797211 Email: [email protected]

SUMMARY OF KEY CHANGES

Page 19: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

SUMMARY OF KEY CHANGES

Planned and actual activity is measured in SLN’s rather than £’s

‘Starts’ are based on fixed minimum retention periods rather than ‘census dates’

Most provision (more than previously) is funded via fixed (‘listed’) GLH / SLN values

New Diplomas would generally appear to meet LSC criteria for being ‘high priority’ provision

New Diplomas will be funded via ‘Learner Responsive’ funding (whether within the ’16-18’ or ‘Adult’ funding ‘blocks’)

Capping (at 1.75 SLN’s per learner) replaces ‘tapering’

Page 20: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

SUMMARY OF KEY CHANGES (continued)

The Provider Factor replaces a number of independent variables within the previous funding system

Removal of the ‘census dates’ means that SLN out-turn can never decrease over the course of a funding year

Key skills and the ’16-18 FT Entitlement’ (no longer funded together) are not exempt from capping calculations

Funding differentials will operate across the 3 discrete funding blocks (reflected in different Provider Factors and Funding Rates)

New Diplomas are funded based on the individual elements being delivered by a provider

Page 21: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

_______________________________________________________ Drake Lane Associates Ltd. www.drakelane.co.uk Tel: 01756 797211 Email: [email protected]

DEMAND-LED FUNDING 2008-09

KEY REFERENCE DOCUMENTS

Page 22: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

KEY REFERENCE DOCUMENTS 2008-09

• Delivering World-class Skills in a Demand-led System (LSC, January 2007)

• LSC Grant Letter: 2008-09 (DCSF & DIUS, November 2007)

• Our Statement of Priorities - Better skills, Better jobs, Better lives (plus associated Addendum - LSC, November / December 2007)

• The 16-18, Adult Learner & Employer-responsive Funding Models (LSC, November 2007)

• Funding Guidance for 2008-09 (LSC) - Funding Rates for 2008-09 (December 2007 and February 2008 version 2) - Funding Formula for 2008-09 (pending) - Funding Principles, Rules and Regulations for 2008-09 (April 2008) - ILR Funding Compliance Advice & Audit Guidance for 08-09 (April 2008) - ILR Funding Claims & Audit Returns 2008-09 (pending)

Note: All above documents are available via the LSC website (www.lsc.gov.uk)

Page 23: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

_______________________________________________________ Drake Lane Associates Ltd. www.drakelane.co.uk Tel: 01756 797211 Email: [email protected]

DEMAND-LED FUNDING 2008-09

APPENDICES

Page 24: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

APPENDIX A - FUNDING CATEGORIES

Scope and coverage of 16-18 funding model

16-18 year old learners enrolled to the following programmes:

• Provision in school sixth forms• FE provision• New Diplomas• Programme-led Apprenticeships (not full framework)• Entry to Employment (E2E)• Foundation Learning Tier (FLT)

Additional notes:

• Includes 16-18s enrolled to NVQ programmes (which are currently funded as FE)• Includes 16-18 Apprenticeships for planning and budgeting purposes only (but which will be funded via the Employer Responsive model)

Page 25: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

APPENDIX A - FUNDING CATEGORIES (continued)

Scope and coverage of Adult Employer Responsive funding model

Adults (19+ year old) learners enrolled to the following programmes:

• Apprenticeships (all types covering full framework)• Train to Gain (including associated Skills for Life)• NVQs delivered wholly or partially in the workplace (and funded as FE in 2007-08)

Additional note:

• Includes 16-18 Apprenticeships for funding purposes (although such provision will have a separate allocation within the Employer Responsive model)

Page 26: DEMAND-LED FUNDING THE FE FUNDING METHODOLOGY 2008-09 Presenter: Edward Drake April 2008 _______________________________________________________ Drake

APPENDIX A - FUNDING CATEGORIES (continued)

Scope and coverage of Adult Learner Responsive funding model

All LSC funded provision and learners not covered by either the16-18 or Adult Learner Responsive funding models

Additional note:

• Also excludes Adult Safeguarded Learning funding


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