AEB funding rules and rates 2016/17

1. AEB funding rules and rates 2016/17 10:30 start15:30 finish Wifi: wifi5046 Nick LinfordDirector at Lsect

2. Agenda (slides will also be emailed to you after the event) 10:30  AEB overview, key documents and changes11:10  Funding entitlements and ‘streamlined’ qualification eligibility or RARPA11:50  Break for refreshments12:10  The Single Activity Matrix and full or co-funded funding formula13:00  Break for lunch13:50  Monthly funding and making sense of the different funding eligibility14:30  The ILR and related data tools15:00  Curriculum planning hints and tips15:30  End

3. AEB overview, key documentsand changes Nick LinfordDirector at Lsect

4. The Adult Education Budget – fixed at £1.5bn “Brings together the previous Adult Skills Budget, Community Learning and Discretionary Learner Support into a new single budget line.”

5. The Adult Education Budget “This is an executive summary of the changes that we plan to make as part of the transition to full skills devolution starting from 2018/19” “We have focused on the aspects that will enable the establishment of flexible commissioning before the transfer of responsibilities to local areas.” “it will have much greater flexibility in how colleges and other training organisations focus on responding to local economic priorities and outcomes” http://tinyurl.com/zflnv63 We define ‘local area’ as those local government authorities with devolution deals. We are working with these authorities to develop and implement arrangements that support the transition to skills commissioning and full devolution starting, subject to readiness conditions, from 2018/19. For all other locations ‘local area’ refers to local stakeholders, including Local Enterprise Partnerships (LEPs) and local authorities. Colleges and training organisations should consult and work closely with local stakeholders to determine their contribution to local skills outcomes “There can be no devolution of the AEB to an area before successful completion of an area review”

6. The Adult Education Budget changes Revisiting all learning aim eligibility and alignment with DfE > Legal entitlements fully-funded (firstness) offer > Local flexibility (including non-qualification) “We have removed some of the complexity by: > categorising three groups of learners (19 to 23, 24+ unemployed, and 24+ other > removing vocational and workplace co-funding and focusing funding on apprenticeships > removing categories now superseded by Advanced Learner Loans” Also created a Single Rates Matrix for qual and non-quals

7. Key documents and sources for 2015/16 ASB funding https://www.gov.uk/government/publications/ilr-guides-and-templates-for-2015-to-2016 https://www.gov.uk/government/publications/sfa-funding-rates-and-formula-2015-to-2016 Funding rules and 3 addendums : https://www.gov.uk/government/publications/sfa-funding-rules-2015-to-2016 https://www.gov.uk/government/publications/qualifications-simplified-funding-rates-2015-to-2016 https://www.gov.uk/government/publications/ilr-specification-validation-rules-and-appendices-2015-to-2016 https://www.gov.uk/government/publications/sfa-performance-management-rules https://hub.imservices.org.uk/Learning%20Aims/Pages/default.aspx

8. Key current docs and sources 2016/17 AEB funding https://www.gov.uk/government/publications/qualifications-getting-approval-for-funding http://tinyurl.com/zflnv63 Grant letter: http://tinyurl.com/zkrbsuf http://tinyurl.com/zlpweu9 https://www.gov.uk/government/publications/sfa-funding-rates-and-formula-2016-to-2017 https://hub.imservices.org.uk/Learning%20Aims/Pages/default.aspx https://www.gov.uk/guidance/sfa-funding-rules#to-2017-funding-year https://www.gov.uk/government/publications/ilr-specification-validation-rules-and-appendices-2016-to-2017

9. And more recently the SFA allocations • 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 “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.” More on this later https://www.gov.uk/government/news/2016-to-2017-funding-allocations-positive-news-for-the-sector

10. Funding entitlements and ‘streamlined’ qualification eligibility or RARPA

11. Funding learning aims With end of QCF, alignment with DfE and creating a ‘flexible’ local offer it’s a big change programme > Legal entitlements fully-funded (firstness) offer English and maths and Level 2 and 3 “We are working with the DfE and EFA on a single, streamlined process for qualification eligibility. We expect to say more about this in the spring alongside further announcements about the programme of Technical and Professional Education reforms.” > Local flexibility (including non-qualification) Level 2 and below including non-qualification with RARPA

12. ‘How qualification level maps to public funding’ https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/500429/Qualification_Eligibility_Principles_V1.pdf

13. Legal entitlement qualification approval In the 16/17 the qualifications in scope for the legal entitlements are: CORE NON-CORE Amongst other requirements, the non-core must map to the Standard Occupational Classification (so be vocation specific) and meet a minimum size threshold of 300 hours of Guided Learning at Level 3 or 150 hours of Guided Learning at Level 2 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/499554/TheLegalEntitlements_v1_Feb2016__1_.pdf

14. Legal entitlement qualification approval The entitlements allow learners aged: > 19 to 23 to be fully funded for a first qual at Level 2 and/or Level 3 > 19+ to be fully funded for a qual in English or maths up to and including Level 2 “The 2016 to 2017 funding year is part of a transitional period as we move towards full skills devolution and the implementation of Technical and Professional Education (TPE) reforms” NO MORE THAN 20 TPE ROUTES? “In March, after our consultation with colleges, other training organisations and awarding organisations, we will update this document. We will publish a final list of qualifications that can be delivered as part of the entitlements. We will agree the process for adding new qualifications to the entitlement with the DfE and confirm this when we update this document” There are over 500 current L2 and L3 qualifications at risk “More info will be available when a Skills White Paper is published in the spring” https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/499554/TheLegalEntitlements_v1_Feb2016__1_.pdf

15. Local flexibility qualification approval All about the “move towards full devolution of the AEB.” “As part of this transition we have introduced local flexibility.” “To support local area needs and deliver agreed local outcomes, colleges and other training organisations will decide on the most appropriate form of training provision. This may or may not include qualifications” “We only require delivery of a qualification where a learner exercises their legal entitlement to a first full Level 2 or Level 3 and/or English and maths” If qualification used as part of local flexibility it must be eligible, but formal SFA approval process scrapped. However, must be on RQF, have Guided Learning (GL) recorded as a component of Total Qualification Time (TQT) and adhere to 6 SFA principles (e.g. not be vendor qual). Existing quals must have a minimum glh applied. So not all quals on RQF automatically eligible. One of the 6 principles is: “available to learners who need help to move into work, or remove a barrier to getting into work” https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/500429/Qualification_Eligibility_Principles_V1.pdf

16. New local flexibility quals added to the Hub (LARS) every month From April 2016 New qualification components added to the Hub on a quarterly basis “Every quarter we will review significant changes to qualifications that may affect its funding, to decide whether to change the funding.” https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/500429/Qualification_Eligibility_Principles_V1.pdf

17. RARPA “Where you are not delivering a regulated qualification you must ensure that you have appropriate and robust quality assurance processes in place. For instance ‘Recognising and Recording Progress and Achievement’ (RARPA) that would be acceptable to Office of Standards in Education (Ofsted)” “This guidance may also be of interest to teachers using RARPA. While it has been developed and tested on provision for learners with learning difficulties, the process may also be used for any learning programmes and groups of learners, although some of the criteria may require minor modification.” “a template for recording information on how to use the standards, criteria and evidence and examples derived from practice is provided in section 3.” http://send.excellencegateway.org.uk/content/eg6813

18. The five stages of RARPA Aims appropriate to an individual learner or groups of learners (clearly stated learning aims) Initial assessment to establish the learner’s starting point Identification of appropriately challenging learning objectives: initial, renegotiated and revised Recognition and recording of progress and achievement during programme (formative assessment): teacher feedback to learners, learner reflection, progress reviews End-of-programme learner self-assessment; teacher summative assessment; review of overall progress and achievement http://send.excellencegateway.org.uk/content/eg6813

19. The Single Activity Matrix and full or co-funded funding formula

20. Funding rates currently based on the QCF Introduced in 2013/14 the rates have been based around QCF credits

21. Funding rates now More efficient at start of a step

22. Setting rates for a new Matrix from 2016/17 “For new starts funded from the AEB in the funding year 2016 to 2017, rates for qualifications are set using the funding rate that was set in 2015 to 2016. If a rate was not set in the funding year 2015 to 2016, rates for qualifications are set using regulated GLH; where GLH is not supplied, we will use Total Qualification Time (TQT). For activity that is not a regulated qualification, rates are set using planned hours.” “We group GLH, TQT or planned hours into funding bands to generate a funding rate. The rates are held in the SAM, with the rows representing the funding band and the columns representing the programme weighting.” “We record activity that is not a regulated qualification using generic learning aims called ‘class codes’ (refer to Appendix H in the ILR specification for more information)”

23. SAM funding rates from 2016/17 Now that the QCF is being phased out, the new Single Activity Matrix is based around guided learning hours. Rates same but extra ‘very small’ rows

24. Example of how bands are efficiency steps Most efficient at start of a step (e.g. 21 hours) GLH, TQT or planned hours

25. Funding per SAM hour £5.34 average GLH, TQT or planned hours

26. SAM high and low efficiency points

27. Other funding rates (unchanged from 2015/16) BUT ALWAYS CHECK LARS The single work-placement and work-preparation rate for traineeships of £970 Annual funding cap of £4,400 for each learner each year, before any weightings Learning Support still at a fixed monthly rate of £150

28. AEB fully funded formula The base rate and programme weighting form part of a larger formula x x x = PW DU BR ACU Disadvantage uplift Funding Base rate Programme weighting Area cost uplift PW = Set for each aim based on the Sector Subject Area assigned to the aim. They are A (1), B (1.12), C (1.3), D (1.6) and E (1.72) DU = Based on learner’s home postcode. If in one of the 27% most deprived areas (based on IMD 2015 in 16/17) then the DU is between 1.084 and 1.336 ACU = Based on delivery location, this is a South East weighting which rises the closer the delivery to central London (1.2 max)

29. AEB co-funded formula PW DU BR BR ACU Funding is reduced by half the unweighted base rate _ The co-funded amount deducted from funding is half the value listed for that learning aim on LARS x x x x = 0.5 So if you choose to set fees on this level, it is the same for that base rate for all learners across England

30. Monthly funding and making sense of different learner funding eligibility

31. Qualifying period for funding An learning aim will only be counted if it is funded, and will only be funded if it is eligible AND passes the qualifying period The length of the learning aim is defined by the calendar days (including weeks) between the start date and the end date in the ILR If a learning aim has and actual end date before the qualifying period and is an early completer then the aim is counted and all of the funding is earned If a learning aim has and actual end date before the qualifying period and is not completed then the aim is not counted and novfunding is earned

32. Monthly funding instalments Funding for each learning aim is paid in monthly instalments according to the start and end dates in the ILR, based on a standard formula On programme payments are 80% of the weighted co- or full-funding and paid monthly (with double in month one). This is paid for the months before their actual end date. Achievement payment for remaining 20% paid in the month of the actual end date where the aim is fully achieved For example, a 9 month learning aim with weighted funding of £1000 would be paid across 10 instalments as follows: £200 £160 £80 £80 £80 £80 £80 £80 £80 £80 Monthly instalments

33. Job outcome payment excluded from achievement rates Up to 90% of the weighted rate can be paid for a non-achieved learner if a fully funded unemployed learner who can provide evidence they have a job for at least 16 hours a week for four consecutive weeks. Any unemployment benefits must also be declared as stopped. Example: £1000 weighted rate pays £900 across 10 instalments where learner completes, doesn’t achieve but is eligible for a job outcome payment £160 £100 £80 £80 £80 £80 £80 £80 £80 £80 Example: £1000 weighted rate pays £580 across 10 instalments where learner withdraws in month six, but is eligible for a job outcome payment £160 £100 £80 £80 £80 £80

34. Example EFA v SFA traineeship funding Using likely scenario (10 week traineeship) Excludes learner and provider specific weightings for disadvantage and area cost

35. Traineeship achievement funding (SFA) “You will earn the [20%] achievement payment for the work-placement and work-preparation element if evidenced within six months of completing the traineeship when the learner has a positive destination recorded on the ILR, for example, progressing to an apprenticeship, job or further learning as defined in the Funding Rules” 16/17 rules state:Further learning = “For 19- to 24-year-olds, the study of a qualification that is at least 150 glh at Levels 2 or 3 (or both) and recognised in the performance tables or eligible for funding as part of the ‘entitlement offer’.” else “Progression to a new English and maths qualification which is a level higher than that achieved in the traineeship” Employment = A job, including being self-employed, that is for at least 16 hours a week and for eight consecutive weeks Apprenticeship = A start that meets the minimum qualifying days evidenced by ILR records or a self-declaration by the learner.

36. Funding eligibility

37. Wider SFA definition of unemployed In addition to fully-funding people who are on JSA, ESA or universal credit… “Providers may also use their discretion to fund other learners if all of the following apply: > The learner receives other state benefits and earn less than 16 times the National Minimum Wage a week or £330 a month. > The learner wants to be employed and you are satisfied that the learning is directly relevant to their employment prospects and the local labour market needs.” So likely volumes of fully-funded provision will rise How long before classroom co-funded provision is scrapped?

38. The ILR and related data tools Nick LinfordDirector at Lsect

39. Reminder of key AEB changes for 2016/17 > No workplace co-funding > Level 3+ loans extended to 19-23s > All L2 and 3 qualifications having funding eligibility reviewed in context of legal entitlement definition > Funding ‘flexibility’ for non-qualification at level 2 and below > An ‘updated’ SFA definition of unemployed, allowing for continuing provider discretion to fully-fund But, for now, data requirements remain unchanged DATA IS FUNDING

40. Individualised Learner Record and related tools £ Funding Information System (FIS) for indicative funding values, errors and warnings Provider Funding Report (PFR) ILR xml file IM services online Hub College/training provider College/training provider student system ? Data Self Assessment Toolkit (DSAT) for checking data credibility Any funding errors

41. ILR for 2016/17 https://www.gov.uk/government/publications/ilr-specification-validation-rules-and-appendices-2016-to-2017 Beware: I think this field will take on a new importance

42. Key ILR fields used by funding software > Funding model > Learning aim > Start date > Planned and actual end date > Completion status > Outcome Also employment status (ESF match issues) And how important will the Destination and Progression records become?

43. Curriculum planning tips Nick LinfordDirector at Lsect

44. Using LARS (always check the rates and dates) https://hub.imservices.org.uk/Learning%20Aims/Pages/default.aspx

45. Using Ofqual’s register http://register.ofqual.gov.uk/Qualification

46. 6 month Monthly profiling 12 month Paid from 2015/16 allocation Paid from 2016/17 allocation £4,665 £2,080 £2,585

47. AEB devolution and subcontracting Nick Boles to the SFA: “I would expect to see less sub-contracting as funding is put in the hands of users or allocated more locally. It will be for employers to choose their own provider of apprenticeship training when we move into the levy system, and I would expect providers to make their arrangements directly rather than via sub-contracting. “As the AEB becomes devolved, it will be for local commissioners to take a view about the acceptability of sub-contracting for the money they allocate. Where sub-contracting forms a significant part of a local area’s provision, area reviews will want to consider any specific recommendations in the configuration of this provision as part of future arrangements. For 2016/17 you will want to ensure that sub-contracting practices are consistent with the need to achieve value for money in the sector, and to continue to take action against providers who are either operating unacceptable practices, or failing to provide clear and timely information. “I would like you to report to me the controls in place by the end of March 2016 to protect the interests of learners and employers.” Grant letter: http://tinyurl.com/zkrbsuf

48. AEB and consideration of out-of-area From the AEB allocation letters “You will notice that your funding statement includes a map setting out the local authority areas your learners come from. This is intended to help you understand your pattern of provision and aid any future commissioning discussions with local stakeholders. “This will be particularly important for those of you working with areas that have a skills devolution agreement or a skills incentive pilot. In understanding the pattern of delivery, you should give specific consideration to the provision you sub-contract and how much of it is outside your immediate commissioning area(s).” “As we move to local commissioning and devolution, commissioners will expect local resources to be deployed to support their local area. We will share information on where your sub-contracted provision is delivered with areas that have a skills devolution agreement or a skills incentive pilot to inform their discussions with you.”

49. AEB analysis I’ve attempted to do… * Includes EAS funding as SFA would not share the funding data, so had to rely on 14/15 delivery data Will each area have different subcontracting policy? Will each area set learner location boundaries/requirements http://feweek.co.uk/2016/04/13/geographic-funding-data-published-for-first-time/

50. Key planning factors to remember > It is a per enrolment funding system (so larger classes usually mean more efficiency) > In-year funding rates makes for fair income and expenditure models, but use averages when planning > Not every enrolment will be funded as a start and not every start will complete or achieve > Curriculum plans need monitoring and adjustment within academic and SFA financial year constraints > Consider how many learners live out of area and why > Do you know the priorities of your LEP and how aligned your 2016/17 provision will be?