LSC Funding 2008/09 Methodology and formula

1. LSC Funding 2008/09Methodology and formula "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 Nick Linford Head of Planning, Funding and Projects 17 December 2007

2. 250 200 150 50 0 1. National Statement of Priorities 2008/09 - 2010/11 2. National Policy Summaries for 2008/09 (more than 80) The reading material Page count The LSC bedtime reading Complex landscape! 100 3. Funding Models for 2008/09 (including new formula) After a summary of the new funding models we will focus on the new LSC funding formula for 2008/09

3. School 6th Forms 16-18 model Entry to Employment Adult learner responsive model Further Education Apprenticeships Employer responsive model Train to Gain New funding models 2007/08 2008/09 * * 16-18 apprenticeships planned and budgeted in 16-18 model (DCSF)

4. this x this = £ x this + this Will get 2.1% real terms protection 4.2% in cash terms Will get 2.1% real terms protection The 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 There will be winners and losers, as shown in this LSC graph for 16-18 funding

5. SLN Qualification rates not published (DLC v3 this week?) National rates not published (this week with DLC v3?) NFR Final values based on F05 submission 8 Feb 2008 PF ALS Provider values not published and 40% negotiated Funding Protection (?) and negotiation of SLN allocation The impact It is impossible for us to model the financial impact at present because: x x + = However, understanding the funding models and formula now (including related tools) will be invaluable for planning, negotiating and tendering for 2008/09.

6. More complex in reality SLN could be listed or unlistedand has maximum per learner x £/SLN may be subject totransitional protection x PF has up to six elements,based on history (16-18 & adult)or actual (employer model) + ALS allocations will include formula and negotiation element = Total funding has a cap The demand-led funding formula Simple at first glance Standard Learner Number (SLN) x National Funding Rate (£/SLN) x Provider Factor (PF) + Additional Learning Support (ALS) = Total funding Oh, and three census dates replaced by minimum attendance

7. Full Time (1 FTE and 1.22 SLN) Full Time (1 FTE and 1 SLN) Part Time (0.5 FTE and 0.5 SLN) Guided Learning Hours Standard Learner Numbers SLNs replace the National Base Rateand will either be listed on the Learning Aims Database, or unlisted and based on guided learning hours in A32 SLNs (divisor)08/09 NBR (loadbands)07/08 Glh / 450 = SLN with a learner cap a1.75 SLN per year

8. Calculating a learner SLN Example for 4 AS levels (listed 0.33 each) = 1.32 SLN one learner Basic Skill in 90glh (unlisted) = 0.20 SLN in one year Entitlement (listed) = 0.25 SLN = 1.77 SLN But this exceeds 1.75 per year cap, so this learner SLN is in fact 1.75 = 1.32 SLN The SLN value is actually allocated to a year based on number of days between start and actual end date The LSC will continue to review rates, and will annually change some listed rates and make others unlisted (and visa versa)

9. When do SLNs count? This is commonly referred to as the definition of a start The three funding census dates have been scrapped Instead there are minimum attendance measures, based on duration If an enrolment meets the minimum attendance criteria the SLN value assigned in the given academic year will be counted Resits, retakes and transfers do not generate an SLN value

10. Things to note: • This national rate (£ per SLN) will be different for each model • It will be set based on affordability • Rates for 08/09 will go up less than 2.5% (e.g. 2.1% for 16-18) • The co-funded rate will fall each year as fee % increases The National Funding Rate per SLN The LSC will set a fully-funded and co-funded £ per SLN each year e.g. 1.32 SLN x £2,750 NFR = £3,630 But the story does not end here as we must now apply theprovider factor

11. The Provider Factor Each funding model has its own provider factor, and only changes in year to reflect actual delivery within Employer Responsive Model Area Cost (e.g. 1.200) x Disadvantage (e.g. 1.079) x Programme weighting (e.g. 1.217) Provider factor (e.g. 1.334) = x Short-programme modifier (e.g. 1.001) x Success factor (e.g. 0.846) e.g. 1.32 SLN x £2,750 NFR x 1.334 = £4,842.42

12. Use the formula at learner level If the NFR is £2,750 and PF is 1.334, then how much funding? 1.73 x £2,750 x 1.334 = £6,346.51

13. 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 £1,607 • Fully-funded NFR is £2,700 • Provider Factor is 1.334 • £1m for Additional Learning Support 1,600 SLN x £1,607 NFR x 1.334 = £3,429,981 co-funded 3,600 SLN x £2,700 NFR x 1.334 = £12,966,480 fully funded + £1,000,000 ALS = £17,396,461

14. 2500 2000 Learners Part time adults 1500 1000 SLNs 500 0 2004/05 2005/06 2006/07 When is a learner number not a learner number? When it is a ‘Standard Learner Number’ SLNs are a new volume measure that are not the same as FTEs.Caution recommended when used for non-funding purposes.

15. Find out more at www.lewisham.ac.uk/pf