Learner-responsive and employer-responsive funding Nick Linford Director of Planning and Performance 4 December 2008 "The move to a demand-led funding

Learner-responsive and employer-responsive funding

Nick LinfordDirector of Planning and Performance4 December 2008

"The move to a demand-led funding system in 2008/09 signifies a wholesale step change for the learning and skills sector."

LSC 27 November 2007

10.00 Welcome and introductions

10.15 Context and summary of changes

11.00 Learner-responsive funding (16-18 and 19+)

12.30 Lunch

13.15 Employer-responsive funding – Train to Gain

14.30 Coffee

14.45 Employer-responsive funding – Apprenticeships

15.30 Closing remarks

16.00 End

Workshop agenda

CONTEXT AND SUMMARY OF CHANGES

The context - 14-19 funding (DCSF)

Legislation planned to enable:

• LSC funding role given to Local Authority (Lewisham Council)

• Compulsion to stay in education or continue training until 18

But policies to encourage participation being put in place now:

• Phased introduction of new Diplomas from 08/09

• September Guarantee and entitlement to an Apprenticeship

• Expansion of Young, Pre, and Programme-led Apprenticeships

Most planned in apprenticeships from 09/10:

655 660 664 666

238 240 260 281

2007/08 2008/09 2009/10 2010/11

16-18 FE Full Time Learners ’000 (+2% in England)

16-18 Apprenticeships ’000 (+18% in England)

16-18 growth

Source: LSC Grant Letter 2008/09

The context - adult funding (DIUS)

Adult Safeguarded Learning Learners with learning difficulties and/or disabilities

Skills Accounts

Individual-responsive (excl. Skills Accounts)

Train to GainEmployer Responsive, (excl. Train to Gain)

The following graph is from page 26 of the Annual Statement of Priorities

Projected expansion of demand-led funding between 2005-06 and 2014-15 in England

Note projected dominance of Train to Gain and Skills Accounts by 2014but more cautious than proposals in Leitch Review of Skills

05/06

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15

Academic Year

Fu

nd

ing

in

clu

din

g i

nfl

ati

on

(£

mil

lio

ns

)

Summary of changes - new funding models

2007/08 2008/09

Further Education

16-18 model

Adult learner-responsive model

Employer-responsive model

Apprenticeships

Entry to Employment

Train to Gain

* 16-18 apprenticeships planned and budgeted in 16-18 model (DCSF)

School 6th Forms

*

Summary of changes - new funding formula

New ‘demand-led funding formula’ for FE, WBL and TtG

Introduction of: Standard Learner Numbers (SLN)

National rates based on affordability

Provider factor

ALS allocated on a formula

this

x this

x this

+ this

= £

There will be winnersand losers, as shown in this LSC graph for 16-18 funding

Will get 2.1% real terms protection

Will get 2.1% real terms protection

4.2% in cash terms

Learner-responsive funding

The demand-led funding formula

Simple at first glance

SLN could be listed or unlistedand has maximum per learner

£/SLN may be subject totransitional protection

PF has up to six elements,based on history

ALS allocations will include formula and negotiation element

Total funding has a cap

x

x

=

+

More complex in reality

Standard Learner Number (SLN)

National Funding Rate (£/SLN)

Provider Factor (PF)

Additional Learning Support (ALS)

Total funding

x

x

+

=

Oh, and three census dates replaced by minimum attendance

The Standard Learner Number

SLNs are a new volume measure, replacing loadbanded and listed unweighted National Base Rates (NBRs).

For example:

A full time NVQ in Beauty has an unweighted listed National Base Rate of £3,052 in 07/08. This is 520 SLN glh or 1.1556 SLN (listed) in 08/09

A full time Cert in Literacy in 450glh has an unweighted loadbanded NBR of £2,641 in 07/08. This would become 1 SLN (unlisted) in 08/09. If 460 glh it would become 1.0222 SLN.

If they are listed the SLN value can be found within the Learning Aims Database (LAD). This may be expressed as an SLN GLH value.

If SLN is not listed in the LAD then the SLN = glh (A32) divided by 450

The Standard Learner Number

SLN GLH for 16-18 and adult responsive funding are in the LAD

http://providers.lsc.gov.uk/LAD/

Listed

NVQ example

Unlisted

Basic skills example

Unlisted SLNs in more detail

Full Time (1 FTE and 1 SLN)

Guided Learning Hours

Part Time (0.5 FTE and 0.5 SLN)

Full Time (1 FTE and 1.2222 SLN)

SLNs (divisor)08/09

NBR (loadbands)07/08

Watch out for part time Access to HE and part time onsite NVQs

They will now be unlisted(SLN based on glh in A32)

Listed SLNs, the cap and rate changes

Like now, where the QCA have recommended and/or LSC have identified a common duration for a course, a fixed rate is set in the LAD

SLN values per enrolment are added together, but cannot exceed the 1.75 SLN per year cap (incl. entitlement if appropriate)

The LSC will continue to review rates, and will annually change some listed rates and make others unlisted (and visa versa)

Example for 5 AS levels = 1.6667 SLNone learner Entitlement = 0.2533 SLNin one year One key skill = 0.08 SLN

= 2 SLN

But this exceeds 1.75 per year cap, so this learner SLN is in fact 1.75

The SLN or SLN GLH value is actually allocated to a year based on number of days between start and actual end date

4 Applied AS in 190glh each Listed 180 SLN GLH

1 Key skill in 30glh Listed 36 SLN GLH

4 AS levels in 140glh each Listed 150 SLN GLH


Entitlement Listed 114 SLN GLH


1 Basic Skill in 90glh Unlisted


Cert in nums in 450glh Unlisted

Cert in literacy in 225glh Unlisted

Taught during the day and all start in Sept ’08 and achieve in July ‘09



= 1.68 SLN

= 1.4 SLN

= 1.5 SLN

= 1.67 SLN

= 1.75 SLN

How many SLNs for these learners?

When do SLNs count?

The three funding census dates have been scrapped

Instead there are minimum attendance measures, based on duration

Duration Minimum attendance

24 weeks or more 6 weeks

2 to 24 weeks 2 weeks

Less than 2 weeks Once

If an enrolment meets the minimum attendance criteria the SLN value assigned in the given academic year will be counted

This is commonly referred to as the definition of a start

Resits and transfers do not generate an SLN value

The National Funding Rate per SLN

The LSC set fully-funded £ per SLN each year, and in 08/09 they are:

• School Sixth Forms £2,945

• 16-18 FE £2,860

• Adult Learner Responsive £2,775

Things to note:

• Rates are set based on affordability, not inflation (e.g. 2.1% for 16-18)

• The co-funded rate will fall as fee % increases to 50% by 2010/11

• A reduced co-funded rate is applied for fee payers

• If transitional protection is required a provider rate will be applied

The Provider Factor

The provider factor is calculated annually in advance for allocations (based on 8 Feb ILR F05 for FE and ILR W13 for WBL/TtG)

Each funding model has its own provider factor

SLN x NFR now needs to be multiplied by a provider factor

Provider factor (e.g. 1.335) =

Success factor (e.g. 0.846)

Area Cost (e.g. 1.200)

Programme weighting (e.g. 1.217)

Disadvantage (e.g. 1.079)

Short-programme modifier (e.g. 1.001)

x

x

x

x

The Provider Factor

Providers can see ‘indicative’ Provider Factors for each model in PaMS

1.335 Provider factor (example for 16-18 provider)

The funding earned!

So a 16-18 year old enrolment in a college might earn:

1.75 SLN x £2,860 NFR x 1.335 PF = £6,681.68

Full time onsite NVQ (540glh) Listed 520 SLN GLH

Key skills in Nums (40glh) Listed 36 SLN GLH

Key skills in Comms (45glh) Listed 36 SLN GLH


With this knowledge, how much funding for this learner?

And this adult learner in a college with 1.411 PF?

1.57 SLN x £2,860 NFR x 1.335 PF = £5,990

Non-accredited creative writing in 90glh Unlisted

0.2 SLN x £2,775 NFR x 1.411 PF = £783

Additional Learning Support

The demand-led funding formula does of course also include ALS

SLN x NFR x PF + ALS = Funding

ALS will be allocated as now, in advance and at provider level.However, in 2008/09 60% of the allocation will be driven by a formula and the remaining 40% will be negotiated (75/25 in 09/10)

ALS claims in excess of £5,500 per learner remain as at present

In the 16-18 model the formula is based on English and Maths pointscores, and in the adult model it is based on the 06/07 level of study

Adult fee element and the co-funded rate

Academic year 2004/05 2005/06 2006/07 2007/08 2008/09

Unweighted 450 glh base rate

£2,394 £2,513 £2,576 £2,640 £2,775

Fee element % 25% 27.5% 32.5% 37.5% 42.5%

Fee element £ £599 £691 £837 £990 £1,179

Annual increase % 15% 21% 18% 19%

Annual increase £ £93 £146 £153 £189

Increase on 2004/05 15% 40% 65% 97%

Adult learner responsive fee element is now nearly double 04/05 level

Plan is for fee element of 47.5% in 09/10 and 50% in 10/11

Train to Gain assumed fees are 42.5% of total (weighted) fundingwhilst each Apprenticeship element has a fee % listed on the LAD

ALR co-funded rate = NFR – (NFR x Fee Element / PF)

Use of the formula at allocation level

Can you work out what this adult-responsive allocation would be?

• 5,000 learners of which 2,000 are fee paying• Average SLN per fee paying (co-funded) learner is 0.8• Average SLN per non-fee paying (fully-funded) learner is 1.2• Co-funded NFR is £1,939 = £2775 - (£2,775 x 42.5% / 1.411)• Fully-funded NFR is £2,775• Adult responsive Provider Factor is 1.411• £1m for Additional Learning Support

3,600 SLN x £2,775 NFR x 1.411 PF = £14,095,890 fully funded

1,600 SLN x £1,939 NFR x 1.411 PF = £4,377,486 co-funded

= £19,473,376+ £1,000,000 ALSTotal assumed learner

fees at 42.5%?

1600 SLN x £2,775 x 0.425 = £1,887,000

Employer-responsive funding

Employer-responsive funding

Apprenticeships (WBL incl. 16-18)

FE mainstream (adult NVQs in workplace)

Train to Gain (e.g NVQ 2 & SfL)

Adult (19+) apprenticeships

£330.2m (+ 4.5%)

16-18 Apprenticeships

£677m (+ 7.1%)

Workplace FL1/2/3/4 (e.g. NVQ) and SfL

£907m (+ 55.5%)

Apprenticeships

£1007.2m (+ 6.2%)

Employer responsive model

2008/09

Train to Gain

£907m (+ 55.5%)

Train to Gain funding

Train to Gain Standard Learner Numbers

All TtG Standard Learner Number (SLN) Values are ‘listed’ on theLearning Aim Database: http://providers.lsc.gov.uk/LAD/

TtG qualificationSLN Value

Higher Lower

Full Level 2 (e.g. NVQ) 0.429 0.286


Numeracy and Literacy 0.18

ESOL 0.18

SLN x NFR x PW x ACU x TtG uplift = Funding

The TtG SLN rates are derived from ‘Activity Costs’ research undertaken by the LSC, and for 2008/09 are as follows:

To claim the higher rate the provider must deliver ‘a minimum of 15 hours of eligible support/learning/training consisting of underpinning knowledge and understanding.’

Para 529 LSC PR&R

Train to Gain National Funding Rate

The TtG National Funding Rate (NFR) for all providers in 2008/09 is:

TtG qualificationSLN Value

Higher Lower



Numeracy and Literacy 0.180

ESOL 0.180


SLN x NFR = unweighted funding

£2,775

NFR

Multiplied by £2,775

Unweighted funding

Higher Lower

£1,190 £794

£1,787 £1,190

£500

£500

Train to Gain Programme Weightings

The Train to Gain Programme Weightings (PW) are uplifts whichfund additional costs associated with the vocational sector.

The PWs are listed for each learning aim on the LAD. There are three Train to Gain PWs:


TtG PWs Sector Subject Areas (SSAs)

1.00 (A)IT Users, Retail, Commercial Enterprise, Hospitality, Leisure, Travel, Tourism, Business, Administration and Law

1.25 (J)Health, Public Services, Care, Agriculture, Horticulture, Animal Care, IT Practitioners, Hair and Beauty

1.50 (K)Engineering, Manufacturing Technologies, Construction, Planning and Built Environment, Transportation, Literacy, Numeracy and ESOL

e.g. 0.429 SLN x £2,775 NFR x 1.25 PW = £1,488.09

Train to Gain Area-costs uplift

The area-costs uplift (ACU) is in essence a London weighting and rises to a 20% increase for 15 of the most central London boroughs (with the remaining boroughs receiving a 12% uplift). However, other areas in the South East also receive uplifts from 12% to 1%.


For both Train to Gain and Apprenticeships the ACU is no longer determined by the provider location. In 2008/09 it will be determined by the delivery location – that is, employer premises.

e.g. 0.429 SLN x £2,775 NFR x 1.25 PW x 1.20 ACU = £1,785.71

Train to Gain Uplift

In June 2008 the LSC announced:


‘To help stimulate provider engagement with Train to Gain andtheir capacity to deliver the service, we will increase the base fundingrates by an additional 3% in each of the next 3 years, over and abovethe previously planned 1.5% per annum increase in rates’

This is applied as an addition uplift within the formula:


e.g.

NVQ 2 in Health (10049873) high rate in Central London

0.429 x £2,775 x 1.25 x 1.20 x 1.03 = £1,839.28

e.g.

Train to Gain worked examplesSLN x NFR x PW x ACU x TtG uplift = Funding

SLN

NFR

PW

ACU

TtG Uplift

Funding

NVQ in Health, Level 2 (low rate) in central London

NVQ in Health, Level 2 (low rate) in Bristol

SLN

NFR

PW

ACU

TtG Uplift

Funding

0.286

£2,775

1.25 (J)

1.20

1.03

£1,226.19 £1,021.82

0.286

£2,775

1.25 (J)

1.00

1.03

Train to Gain worked examplesSLN x NFR x PW x ACU x TtG uplift = Funding

SLN

NFR

PW

ACU

TtG Uplift

Funding

NVQ in Business, Level 2 (high rate) in central London

Literacy, Level 1 in Bristol

SLN

NFR

PW

ACU

TtG Uplift

Funding

0.429

£2,775

1.00 (A)

1.20

1.03

£1,471.43 £771.73

0.180

£2,775

1.50 (K)

1.00

1.03

Train to Gain co-fundingSLN x NFR x PW x ACU x TtG uplift x 0.575 = co-funding

SLN

NFR

PW

ACU

TtG Uplift

Fully-funded

Co-funded

NVQ in Construction, Level 3 (high rate) in central London

0.644

£2,775

1.5 (K)

1.20

1.03

£3,313.28

£1,905.14

Level 3 learners are fully-funded if they are Level 2 ‘jumpers’ or first full level 3 learners under 25 years of age

All other Level 3 learners (incl. ESOL at every level) are co-funded. This means weighted funding is reduced by 42.5% in 08/09 (rising to 50% by 10/11)

Simply multiply full-funding by 0.575 to calculate co-funding

When do Train to Gain SLNs count?

Duration Minimum attendance

24 weeks or more 6 weeks

2 to 24 weeks 2 weeks

Less than 2 weeks Once

If an enrolment meets the minimum attendance criteria the SLN value assigned in the given academic year will be counted

This is commonly referred to as the definition of a start

Train to Gain and Apprenticeship rules now mirror those being used in the learner-responsive models

Train to Gain monthly instalments

Example £1,190 paid for a five month Train to Gain enrolment:

£1,200

DecInstallment

£0 £200 £400 £600 £800 £1,000

JanInst.

FebInst.

MarInst.

AprInst.

MayAchievement

Monthly instalments paid, with last day of the month as census (trigger)

First two months paid in first instalment using an ‘n+1’ approach

But, 25% is held back for achievement

Funding claim sent 4th working day, instalment paid 10th working day

e.g. £600 over 5 months would lead to £200 installment in first month and £100 installments per month for the remaining four months

Train to Gain Payment Profile – worked example

SLN

NFR

PW

ACU

TtG Uplift

Fully-funded

Co-funded

NVQ in Beauty Therapy, Level 3 (low rate) in Manchester

0.429

£2,775

1.25 (J)

1.00

1.03

£1,532.74

£881.32

Month 1

Month 2

Month 3

Month 4

Month 5

Achievement

Total funding

Co-funded installments

£220.33

£110.17

£110.17

£110.17

£110.17

£220.33

£881.32

Train to Gain – additional flexibilities

In July 2008 the LSC published details regarding ‘additional flexibilities’

• New high rate threshold (15 hours)• 3% uplift year on year• Skills for Life eligible at any level• Colleges doing NVQ 1s to be fully funded at Level 2 rates• Up to 30% ‘additional’ (non-first) full level 2s permitted• All Level 2s (incl. non-first) to be fully funded• Up to 20% ‘additional’ (non-first) full level 3s permitted• Level 3 Entitlement to apply to Train to Gain• Colleges with Level 4 and 5 NVQs can negotiate to continue them

In October 2008 DIUS announced further flexibilities for ‘bite-sized’ learning, but don’t expect details until January.

Apprenticeship funding

Apprenticeship ‘blueprint’

ApprenticeshipFramework

EmploymentRights and ResponsibilitiesThis element is often covered aspart of the NVQ or technical certificate

Competence A National Vocational Qualification (NVQ) with assessment methods designed to test competence

Transferable, or ‘key’, skills Frameworks include as a minimum, Key Skills in Communication and Application of Number

Knowledge Some frameworkshave a technical certificate whilst others demonstrateknowledge within the NVQ element

Apprenticeship qualifications on the LAD

Frameworks Tab

http://providers.lsc.gov.uk/LAD/

Apprenticeship rates on the LAD

SLN Value

Fee element percentageProgramme weighting

Employer Responsive Tab

Apprenticeship National Funding Rates

Framework elementsSLN

ValueProgramme Weighting

Fee Element

NVQ 2 in Construction Operations 1.064 1.50 (K) 40.8%

Construction Award (Tech Cert) 0.978 1.30(C) 40.8%

Key Skills in Communication 0.08 1.00 (A) 17.5%

Key Skills in Application of Number 0.08 1.00 (A) 17.5%

Example - Construction Apprenticeship rates on LAD

This now needs to be applied to the full formula, incorporating the National Funding Rate, Area-cost uplift and Disadvantage uplift

SLN x NFR x PW x ACU x DU = Funding

Apprenticeship National Funding Rates

National Funding Rate:


• £2,860 for 16-18 year olds• £2,775 for 19+ year olds

Area-cost uplift: • Maximum of 1.2 (+ 20%) in central London• Based on delivery postcode as per TtG

Disadvantage uplift: • Maximum of 1.32 (32%) additional funding• Based on learner home postcode

Apprenticeship Funding - example

Framework elements

SLN NFR PW ACU DU Funding

NVQ 2* 1.064 £2,860 1.50 (K) 1.20 1.0811 £5,922

Tech Cert 0.978 £2,860 1.30(C) 1.20 1.0811 £4,717

Key Skills 0.08 £2,860 1.00 (A) 1.20 1.0811 £297

Key Skills 0.08 £2,860 1.00 (A) 1.20 1.0811 £297

Total £11,233

Construction Apprenticeship for 16-18 in central London with DU of 1.0811


* Includes funding for Apprenticeship Element

Apprenticeship Funding - example

Framework elements

SLN NFR PW ACU DUFee

elementFunding

NVQ 2* 1.064 £2,775 1.50 (K) 1.20 1.0811 40.8% £3,401

Tech Cert 0.978 £2,775 1.30(C) 1.20 1.0811 40.8% £2,710

Key Skills 0.08 £2,775 1.00 (A) 1.20 1.0811 17.5% £238

Key Skills 0.08 £2,775 1.00 (A) 1.20 1.0811 17.5% £238

Total £6,586

Construction Apprenticeship for 19+ in central London with DU of 1.0811



Apprenticeship Funding - worksheet

Framework elements

SLN NFR PW ACU DU Funding

NVQ 3* 0.986 1.50 (K)

Tech Cert (ACA) 0.556 1.30(C)

Key Skills 0.08 1.00 (A)

Key Skills 0.08 1.00 (A)

Total

Construction Apprenticeship for 16-18 in Bristol (DU of 1.0000)



£2,860

£2,860

£2,860

£2,860

1.00

1.00

1.00

1.00

1.0000

1.0000

1.0000

1.0000

£4,230

£2,067

£229

£229

£6,755


Framework elements


elementFunding

NVQ 3* 0.986 1.50 (K) 48.5%

Tech Cert 0.556 1.30(C) 40.8%

Key Skills 0.08 1.00 (A) 17.5%

Key Skills 0.08 1.00 (A) 17.5%

Total

Construction Apprenticeship for 19+ in Bristol (DU of 1.0000)



£2,775

£2,775

£2,775

£2,775

1.00

1.00

1.00

1.00

1.0000

1.0000

1.0000

1.0000

£2,114

£1,187

£183

£183

£3,667

Apprenticeship monthly instalments

Monthly instalments paid, with last day of the month as census (trigger)

First two months paid in first instalment using an ‘n+1’ approach

But, 25% is held back for achievement (only applied to NVQ and Framework SLN, and only paid when full framework is achieved)

Funding claim sent 4th working day, instalment paid 10th working day

e.g. £600 over 5 months would lead to £200 installment in first month and £100 installments per month for the remaining four months

Funding claim made with TtG data as part of a single monthly ER Individualised Learner Record (ILR) data collection

ILR uploaded online to the LSC Online Data Collections System


Framework elements


elementFunding

NVQ 3* 0.986 1.50 (K) 48.5%

Tech Cert 0.556 1.30(C) 40.8%

Key Skills 0.08 1.00 (A) 17.5%

Key Skills 0.08 1.00 (A) 17.5%

Total

Construction Apprenticeship for 19+ in Bristol (DU of 1.0000)


£2,775

£2,775

£2,775

£2,775

1.00

1.00

1.00

1.00

1.0000

1.0000

1.0000

1.0000

£2,114

£1,187

£183

£183

£3,667

Now calculate the monthly installments for a 3 month course

Month 1

Month 2

Month 3

Achievement

Total funding

£528.50

£784.63

£784.63

£1569.25

£3,667

Closing remarks

The targets tend to relate to the Public Service Agreements (PSAs) as listed within the CSR and DCSF/DIUS Grant Letter to the LSC

The priorities and targets

• Numeracy from Entry 3 (SfL)

• Literacy (including ESOL) now from Level 1 (SfL)

• Full Level 2

• Full Level 3

• Level 4 added

To achieve targets there must be a switch from non-priority provision. This has been termed ‘developmental learning’ (previously ‘other’ or ‘residual’), with planned falls from £508m in 2008/09 to £116m in 2010/11 (excluding FLT)

Funding optimisation revisited

1. Check and monitor the learning aims

2. Set appropriate course durations

3. Recruit and retain sufficient group sizes

4. Maintain high success rates

5. Regularly check the validity of the data

“it is expected that providers will fully comply

with the spirit and intention of the funding principles”.

The official reading material

LSC Funding Guidance 2008/09 (six ‘booklets’ totalling 320 pages)

> Funding Rates

050

100150200250300350

Pag

es

> Principals Rules and Regulations

> Learner Eligibility

> Funding Formula

> ILR Funding Claims and Audit Returns

> ILR Funding Compliance Advice and Audit Guidance

The unofficial reading material

The hands-on guide to post-16 funding

I’ve written this as a reference tool, which should be useful (and even interesting!) for senior managers and governors to curriculum and data/MIS staff

www.fundingguide.co.uk

There are also free resources and more workshop dates on www.lewisham.ac.uk/pf

Let me know what you think!

THANK YOU and I hope you enjoyed the day

Documents

Learner-responsive and employer-responsive funding Nick Linford Director of Planning and Performance 4 December 2008 "The move to a demand-led funding