A ten-year plan for school and college funding Contents

4Post-16 education funding


47.Our evidence on the state of post-16 education funding painted a troubling picture. Participation in full time further education (FE) has more than doubled since the 1980s.95 Yet across 16–19 education, funding per student fell by a full 16% in real terms between 2010–11 and 2018–19. This is twice as much as the 8% school funding fall over a similar period.96 The total size of 16–19 education funding fell by 27% in real terms, from £7.8 billion to £5.7 billion, between 2010–11 and 2018–19.97 These pressures were set against the context of rising demand from increased pupil populations, more complex special educational needs (SEN) requirements, inflation, teacher pay costs, curriculum changes, and pressure to raise standards.98

48.Budget squeezes across post-16 education institutions have not been uniform. Funding per 16–19 full-time equivalent student in the further education sector fell by 18% between 2010–11 and 2018–19, whereas school sixth forms experienced a 26% decline. Funding per student in FE colleges fell by 9% between 2012–13 and 2018–19, whilst sixth form colleges fell by 15% – a difference attributable to a disproportionately high number of disadvantaged students going to FE colleges, which then attract a funding weighting to support more challenging intakes.99 The historical differences between academic and vocational further education funding were also pronounced. On average, in 2014 OECD countries spent 8% more on vocational programmes than on academic ones; the UK spent 11% less.100 The Institute for Fiscal Studies (IFS) said FE per student funding in 2019–20 was projected to be similar to 1990–91 levels – a situation described as “remarkable” given the economic and public spending increases over the past 30 years.101

49.The Government’s well-publicised funding commitments to T levels will not address the scale of these budget pressures. Whilst the substantial T level funding commitments have been widely welcomed, they would be offset by proposed reductions to the rest of further education college budgets. Per student spending has therefore been projected to be held constant up to 2019–20, rather than rise significantly. As the IFS noted, the extra money was also earmarked for additional teaching hours and was therefore “unlikely to ease the resource challenges on the sector”.102

Impacts and implications

50.The impacts of these budgetary pressures have been significant. The amount of guided learning hours for 16–19 pupils fell from 730 hours to 665 hours per student between 2012–13 and 2016–17 – a reduction of 9%.103 The Sixth Form Colleges Association told us that funding pressures had led 50% of schools and colleges to drop foreign language classes, 34% had cut STEM courses, 67% had reduced support or extra-curricular services, and 77% were teaching larger classes. In addition, the institutions were increasingly having to stretch resources to deal with additional issues including mental health, duties under the Prevent programme, and meeting Gatsby career benchmarks,104 as well as providing front line support following NHS and local authority funding pressures.105 We also heard that schools were having to subsidise their sixth forms using their Key Stage 3 and 4 incomes, with knock-on impacts on staff recruitment and the resources available to the rest of the school.106

51.We were particularly concerned about the social justice consequences of squeezed FE budgets. Twice as many disadvantaged 16 to 18 year-olds go to further education colleges than school sixth forms. Disadvantaged students have fewer opportunities to supplement deficient education or support services through private means,107 and we heard that FE colleges’ disadvantage funding was not ringfenced and was being stretched across multiple competing groups.108 The Social Mobility Commission’s State of the Nation 2019 report found that the clustering of disadvantaged students in FE had “fuelled the image of the sector being for ‘other people’ who ‘fail at school’”.109 Luke Sibieta said the FE funding dip was a “crazy” approach to financing education, given the importance of FE and sixth form colleges in providing a gateway to future success in higher education and the labour market.110

52.We asked witnesses why further education in particular had been hit so hard. James Kewin of the Sixth Form Colleges Association believed it was a political decision:

there are more votes in schools than colleges [ … ] there is no sound educational reason why there should be such a sharp drop at the age of 16 in education funding [ … ] There is no good reason why a young person in England gets 15 hours of education compared to 25 hours internationally.111

53.Emily Chapman of the National Union of Students said FE “[didn’t] have the political voice of, say, the universities”, and had struggled as a result.112 Dr Birkinshaw, former President of the Association of Colleges, noted that the FE sector was not so much overlooked by the political establishment as kept in a state of “almost permanent revolution”.113 She criticised the Department’s approach to directing funding at the eye-catching areas whilst core funding was kept “at an all-time low. That means we cannot do our job”.114 James Kewin agreed, arguing that “politically motivated uplifts” did more harm than good since they allowed the Government to rebut calls for more investment by pointing to recent initiatives:

too much of what we see in 16 to 18 now starts with the press release and works back [ … ] This kind of policy by press release is quite damaging and the much more mundane reality is we just need a higher rate of funding.115

54.Witnesses from the further education sector were clear that the first priority for the spending review should be a core funding rate increase, which had been held at £4,000 for 16 and 17 year-olds since 2013–14.116 James Kewin called for a base rate of £4,760 per year which would amount to an increase of around £970 million per year.117 According to analysis commissioned from London Economics, this was needed to increase student services to minimum required levels, protect minority subjects at risk of being cut, and increase non-qualification time (for example extra-curricular activities and work experience).118

55.Several additional areas were highlighted. Funding for English and maths retakes featured prominently.119 Other areas included separate funding for increases in teachers’ pay awards and pensions, a greater capital expansion fund for 16 to 18 education;120 investment in a well-rounded education that covered mental health support, education for parents about careers prospects outside the university route, civic engagement, and giving students a voice;121 addressing the current gap in progression routes, and developing technical education qualifications fit for the future.122

56.Following the conclusion of our oral evidence, a raft of suggested reforms to the further education sector were published under the review of post-18 education and funding led by Philip Augar.123 The Secretary of State said the Department would “look carefully at each recommendation in turn and in the round to reach a view on what will best support students and the institutions they study at”.124

Government position

57.We questioned the Ministers on the reasons behind the post-16 funding pressures and how the problem should be tackled. The Minister for School Standards said that the Government understood the challenges schools and colleges were facing, and was doing its best in the context of a difficult financial situation following the 2008 financial crisis.125 He noted that the Government had not been able to protect post-16 funding, echoing statements he made to our predecessor Committee that there had been a “very conscious policy decision” in 2010 to prioritise 5-to-16 school funding “because all the evidence is that attainment in that period determines the life chances of pupils after the age of 16”.126

58.We were pleased when the Minister for Skills and Apprenticeships Anne Milton MP informed us of her intention to “put [her] tin hat on and go into battle to fight” for increased FE funding.127 The Minister confirmed that “the first thing I would like to see is the base rate rise” (though she did not provide precise figures), and agreed there needed to be greater support for post-16 mental health services.128 She also said social justice and productivity should feature prominently when making a funding case to Treasury, highlighting the links between educational attainment and success in later life, and the number of people “who without a doubt have skills and talents and could be productive members of society” but did not have the right opportunities to do so.129

59.Post-16 education has been cut to the core. We note the Minister’s position about post-financial crash difficulties. Other sectors have however moved on. The continued underfunding of this pivotal stage in education is longer justifiable. These budget pressures are the result of political decisions that have had enormous impacts on young people’s educational opportunities and undermined attempts to tackle social justice. The Department must act urgently to address the damage that has been done.

60.For the now overdue spending review, the Department must make the case to the Treasury for a post-16 core funding rate raise from £4,000 to at least £4,760 per student, rising in line with inflation. This is needed to ensure pupil services can be provided at minimum acceptable levels, and prevent institutions from having to cut back still further on the breadth of subjects offered. The Department must additionally commit to revising this figure following a comprehensive bottom-up assessment of cost requirements as outlined in Chapter 7.

95 Institute for Fiscal Studies, 2018 Annual Report on Education Spending in England, September 2018, p38

96 This figure excludes apprenticeship funding. Including apprenticeship funding would bring the figure to a 14% reduction by 2017–18. For details of the calculations see Education Policy Institute, 16–19 education: trends and implications, 13 May 2019, pp18–21

97 Education Policy Institute, 16–19 education: trends and implications, May 2019, pp7, 18. Note that this figure excludes apprenticeship funding. If included, the reduction amounts to 24% between 2010–11 and 2017–18.

98 Association of Colleges (FUN0026) para 5

99 Education Policy Institute, 16–19 education funding: trends and implications, May 2019, p7

100 Education Policy Institute (FUN0064) para 9.2

101 Institute for Fiscal Studies (FUN0082) para 11. See also Institute for Fiscal Studies, Comparison of parties’ plans for education spending on 16–18 year-olds in England, 1 June 2017. Note the comparison using 2017–18 prices.

102 Institute for Fiscal Studies, 2018 Annual Report on Education Spending in England, September 2018, p48

103 Education Policy Institute, 16–19 education funding: trends and implications, May 2019, p8

104 The Gatsby Benchmarks are a framework of eight guidelines that define the best careers provision in schools and colleges.

105 Sixth Form Colleges Association (FUN0041) paras 9–10

106 St Laurence School (FUN0039) para 14

107 Social Mobility Commission, State of the National 2019: Social Mobility in Great Britain, April 2019, pp60, 68–70

108 Association of Colleges (SCN0492) para 18; Gateshead College (FUN0027) paras 5.1–5.3

109 Social Mobility Commission, State of the National 2019: Social Mobility in Great Britain, April 2019, p 66

110 Q51

111 Q83

112 Q84

113 Q87. Significant developments have included the introduction and expansion of T levels, the apprenticeship levy and reforms, the introduction of Institutes of Technology, the review of level 4 and 5 qualifications, the review of post-16 level 3 and below qualifications, the Government’s focus in its industrial strategy on addressing the productivity gap, and assessments of the impact of the UK’s decision to leave the European Union.

114 Q87

115 Ibid.

116 Qq89–90. The rate for 18-year olds was changed to £3,300 from 2014–15. See GOV.UK, 16–19 funding: how it works, for further details on the banding for national funding rates.

117 Based on 2018–19 total programme funding for 16 to 19 funding allocation of circa £5.1 billion. See GOV.UK, 16 to 19 allocation data: 2018 to 2019 academic year, 22 October 2018.

118 Q106; London Economics, Understanding the funding shortfall in sixth form education, October 2018, p2. See also Association of Colleges on 16-to-18 funding requirements: Association of Colleges, Autumn Budget 2018, 28 September 2018, p5; Q109

124 HC Deb, 4 June 2019, vol 661 col 56

125 Q333

126 Education Committee, Oral evidence: School funding reform, HC 154, 31 January 2017, Q94

127 Q479

128 Qq481, 493

129 Q354

Published: 19 July 2019