Treating Students Fairly: The Economics of Post-School Education Contents

Chapter 4: Funding and regulation

108.The Government has recognised the need to address the decline in post-school education other than full-time undergraduate degrees. It has expressed its desire to address the whole system and to “increase the amount of sub-degree provision” by “building a much more credible college-based offer that sits alongside university provision, to give people a wider range of options than they currently have and that may be better suited to their aptitude, ability and circumstances”.102

109.Witnesses suggested that to do this, reform to the funding and regulation of the further and higher education sectors was required.

Higher and further education overview

“Currently, it could be perceived that further education and higher education function almost as two separate universes destined for ‘different sorts of people’.”103

“[Higher and further education] are completely different worlds.”104

“Britain cannot continue to have a debate on student funding that ignores half the population.”105

110.Higher and further education are funded by different agencies; regulated by different bodies; political accountability lies with different ministers; students access courses through different systems; financial support for students differs according to where they study.

111.This chapter considers the funding and regulation of higher education (degree and sub-degree qualifications), further education (qualifications equivalent to A-Level and below) and apprenticeships.106

Box 5: Higher education definitions for funding and regulatory purposes

Higher education usually, and in this report, refers to qualifications at (Level 4 and above (this means degrees, foundation degree and technical qualifications). For the purpose of funding and regulation the definition is more complex.

The Office for Students provides funding for and regulates providers of higher education.107 Higher education providers are defined as “institutions which provide higher education”.108 Higher education in this context refers only to certain prescribed courses. These include undergraduate and post graduate degrees, foundation degrees, Higher National Diplomas and Certificates. 109

The Office for Students (OFS) funds and regulates these prescribed courses whether they are carried out in a university or further education college. It does not fund or regulate Level 4 and 5 courses that are not on the prescribed list.

The Higher Education and Research Council, the predecessor body to the OFS, explained:

“[ … ] we are only empowered to fund ‘prescribed’ courses of higher education. These include HNCs, HNDs, foundation degrees, bachelors degrees, postgraduate degrees and certain teacher training qualifications. The awarding bodies for such courses include institutions with degree-awarding powers and (for HNCs and HNDs only) Pearson Education Limited.

“Prescribed courses do not include other higher education courses at FECs, such as some professional courses, or modules taught to students who may be taking parts of a prescribed course but have not declared an intention to complete the whole qualification. These other higher education courses are the funding responsibility of the further education funding body, the Education and Skills Funding Agency.”110

Funding of higher and further education

112.The funding of higher and further education is complex: there are multiple funding sources allocated according to differing criteria. Some institutions may claim funding from several funding streams.

Funding for higher education

113.The Student Loans Company pays tuition fee loans directly to the university on behalf of the student. Teaching grants are provided through the Office for Students, which also regulates providers of higher education. Universities also receive research grants provided by Research England and the various Research Councils.111 Some teaching and widening access grants are provided to further education colleges who offer higher education courses. The latter is a relatively small part (five per cent in 2016/17) of the total teaching grant budget.112

114.But the Office for Students only funds and regulates certain prescribed courses in higher education.113 These include undergraduate and post-graduate degrees, foundation degrees, Higher National Diplomas and Higher National Certificates. Prescribed courses can be taught in higher or further education institutions.

115.The Office for Students does not fund or regulate Level 4 and 5 courses that are not on the prescribed list. Courses which are not on the list are the funding responsibility of the further education funding body, the Education and Skills Funding Agency.114 In addition, the Office for Students is only jointly responsible—with the Education and Skills Funding Agency—for the quality and funding of Level 4 and 5 qualifications offered as part of an apprenticeship.115

Types and sources of funding for further education

116.Further education colleges are allocated funding through at least six streams:

(a)16–18 learners116: funding is allocated under a formula administered by the Education and Skills Funding Agency. The funding is used to pay for 16 to 18 year-olds studying certain pre-approved qualifications.117 Alun Francis, Principal of Oldham College, described this aspect of the system as “relatively straightforward”.118

(b)Adult education budget: covers learners aged 19 and above. It provides funds for certain courses, such as first Level 3 qualifications for 19 to 23 year-olds. Mr Francis told us that the operation of the adult education budget was “a fairly complex process, which I am not sure anybody quite understands”.119

(c)Apprenticeships: the advent of the apprenticeship levy changed the way colleges are funded to train apprentices:

(i)For levy-paying firms, training will be negotiated with colleges and other providers and paid directly to the college by the employer their apprenticeship levy account.120

(ii)For non-levy paying firms: costs of training are split between the employer (10 per cent) and Government (90 per cent). The employer pays the college directly; Government funding is provided via the Education and Skills Funding Agency.121

(d)Higher education: as noted above, further education colleges receive funding from the Office for Students for prescribed higher education courses.122

(e)Advanced learner loans: Currently advanced learner loans are available to students over 19 studying most Level 3, 4 and 5 qualifications. The amount loaned depends on the course (in 2015/16 the average loan was £760) and is paid directly to the college. The terms of repayment are the same as tuition fee loans. Data published by the Department for Education show that in 2016/17 over 82,000 applications for advanced learner loans were approved. Of these, less than 6,000 were for a qualification at Level 4 or above.123

(f)Other funding streams: further education colleges also receive money from the European Social Fund and fees charged to students.

Table 4: Higher and further education funding sources

Source of funding

16-19 Budget124

Adult education budget

Advanced learner loans

Tuition fee loans

Higher education grants

Agency

Education and Skills Funding Agency

Education and Skills Funding Agency

Student loans company

Student Loans company

Office for Students

Recipient institutions

Further education colleges

Sixth form colleges

Further education colleges;

Universities offering further education

Further education colleges;

Universities offering further education

Universities and further education colleges offering higher education

Universities and further education colleges offering higher education

Type of courses funded125

Approved Level 2 and 4 qualifications

First Level 2 and 3 and 4 for 19–23 year olds; Basic English and maths

Level 3–5 qualifications that do not qualify for tuition fee loans

Undergraduate degrees and prescribed Level 4 and 5 qualifications

Undergraduate degrees and prescribed Level 4 and 5 qualifications

Level of funding

117.Currently different amounts of public money are allocated to different types of qualification and spent per head on different types of student. The gap in resources between further education and universities was described by one witness as “quite staggering”.126 Data provided by the Department for Education show an £8 billion difference between the budget for each sector in 2017/18 set out in Table 5.

Table 5: Higher and further education spending and participation 2014/15 to 2016/17, and budgets for 2017/18

2014/15

2015/16

2016/17

2017/18 (budget)

Higher education

Further education

Higher education

Further education

Higher education

Further education

Higher education

Further education

Total funding

£14.8 billion

£10.9 billion

£15.6 billion

£10.6 billion

£16.7 billion

£9.6 billion

£17.8 billion

£9.8 billion

Cost to Government127

£8.7 billion

£10.6 billion

£6.5 billion

£10.4 billion

£7.1 billion

£9.4 billion

£7.6 billion

£9.6 billion

Total student numbers

1,500,000

3,576,900

1,510,000

3,274,900

1,549,000

3,152,100

Numbers not yet available

Funding per head

£9,900

£3,000

£10,300

£3,200

£10,800

£3,000

n/a

Source: Written evidence from the Department for Education (HFV0086) and (HFV0121). The number for further education do not include students studying in school sixth forms.

118.In oral evidence the Rt Hon Anne Milton MP, Minister for Further Education and Skills, said she would be “interested to interrogate” these figures.128 The Minister for Universities wished to check the data were “comparing like with like for analytical reasons”.129 In follow-up evidence the Department for Education accepted the accuracy of the calculations, but pointed out that their figures did not include £726 million of capital restructuring expenditure allocated to the further education sector.130

119.Consideration of the details of the allocations in 2016/17 also highlights these disparities. The research grants to universities are £400 million greater than the entire allocation to colleges from the adult education budget.131 Julian Gravatt claimed “the average resource for higher education teaching is about £8,700, whereas for 16 to 18 education it is about £4,500 a year per student.”132

Funding trends

120.This disparity has been exacerbated by three trends in funding for post-school education.

121.First, higher education funding has increased to its highest level for 30 years. As Figure 3 shows, whilst teaching grant income has declined, this has been replaced by tuition fees.

Figure 3: University resources per student per degree, 1990-91 to 2017-18 (2017 price)133

Area chart showing resources per student per degree from teaching grants and fee income from 1990-91 to 2016-17

Source: Institute for Fiscal Studies, Higher Education funding in England: past, present and options for the future (July 2017): https://www.ifs.org.uk/uploads/publications/bns/BN211.pdf [accessed 10 May 2018]

122.Secondly, spending on 16–19 education “has been particularly badly hit by cuts in recent years” and has fallen in real terms.134 Total expenditure on 16–18 education fell by 17.5 per cent in real terms between 2010 and 2017.135 Funding for 18 year-olds was particularly affected: in 2013 the coalition government reduced the rate of funding it provided to colleges for full-time 18 year old learners from £4,000 to £3,000 per head.136

123.Finally, adult education funding has seen significant reductions. Richard Atkins CBE, the Further Education Commissioner, told us that the sector has experienced a “40 per cent cut in adult funding”.137 Allocations Expenditure on adult education and skills fell from £3.16 billion in 2011 to £1.88 billion in 2015/16.138 In 2016/17 the total allocated to the adult education budget was £1.5 billion.139

Problems created by current funding system

124.Problems arise for the further education sector from the level of funding and the structure of the funding system.

125.“FE has been starved”, Shakira Martin, President of the NUS told us.140 She considered that this impeded efforts to ensure parity of esteem between the two sectors.141 The Education Policy Institute stated that the funding gap made it “unlikely that vocational education can present an attractive alternative to university.”142

126.A further key issue is that funding is capped for much of further education. Colleges are allocated a specific level of funds according to national formulae. They earn this by delivering certain approved qualifications. This is in stark contrast to higher education where money is automatically provided for each student. Alun Francis explained (using the example of apprentices) that “because we get an allocation, effectively, we recruit [to] spend that allocation, and we cannot go very much beyond that.”143

127.The reduced funding has also narrowed the range of courses supplied, as the sector “has been given no sensible way of making investments in expensive courses.”144 Professor Sir Alan Tuckett indicated that funding rules were also to blame for this:

“we have arrived at a position in FE where the adult budget is underspent because the rules are set centrally. It is not only funding; it is how we have constricted what we see the budgets doing.”145

128.This concern was shared by other witnesses who considered funding rules impeded the effective operation of the sector and reduced “the ability of providers to innovate new forms of delivery and react to the needs of an evolving economy.”146 Professor Thomas described a “binary system” which made it “very difficult” for students and institutions to access the necessary funding to offer higher and further education.147 He explained:

“The difficulty is the silo payment; you have to have an [Education Funding Agency] or an [Education Skills Funding] payment or a student loan. We think there should be one payment and that undergraduates should be allowed to do apprenticeships and respond to the lifelong learning.”148

129.The limits on funding also impede colleges piloting models of learning which combine degree and technical qualifications. The University of Central Lancashire found that the rules mean “that that a student studying a blended HE/FE degree would … have to self-fund [the FE] element of their education, in addition to their significant university tuition fee.”149

130.These issues affect the ability of the sector to meet economic needs. As outlined above there is a mismatch between skills provided by the education system and those needed by the economy. The Education Policy Institute pointed out that the current system of vocational qualifications was “failing to equip workers with the skills demanded by the labour market”150 The Warwickshire College Group thought the sector was ill-equipped to meet the wider policy pressures on it:

“There is greater emphasis being placed upon the further education sector to ‘solve’ the UK’s productivity problem through an expectation that the sector should be producing the work ready young people for every industry. However, the funding provided for the sector is not supporting this emphasis.”151

131.The structure and distribution of funding in the post-school education sector is unfair and inefficient. Further education is the poor relation to higher education and its position has been weakened and undermined by reductions to its budgets and a complex funding architecture. The separate funding mechanisms create educational silos that prevent innovation. The system accentuates the perception that routes into higher education that begin in further education are inferior to the A-Level/undergraduate degree option.

Developing Level 4 and 5 provision

132.Julian Gravatt told us that developing Level 4 and 5 “is a bit of a chicken and egg issue because you need to develop provision and demand at the same time.”152

133.Some witnesses suggested combining the university and further education sectors. Richard Atkins CBE suggested “we need to blend the lower-tariff universities and the further education system more closely together.” He said this would help make “progression routes more obvious. I would like to see some of those institutions offering more Levels 4 and 5, or even 6, in technical subjects and not simply honours degrees.”153

134.Institutions which had attempted to blend provision pointed to funding and regulatory challenges. The University of Central Lancashire promoted their “hybrid model” which ensured students graduated with both an undergraduate degree and a complementary Level 3 vocational qualification: “Students will divide their time between completing their HE degree, whilst putting into practice what they have learned pursuing a vocational course at a local FE college.”154 However, they pointed to regulatory and funding challenges that arose from this.

Reform of funding: Level 4 and 5

135.Step up to Serve, a community volunteer organisation, was among a number of witnesses to express frustration that “almost all of the debate [ … ] focusses exclusively on patching up funding for young university students when it should be catering for students of all ages in many different types of institution.”155

136.To achieve this there should be “a new offer of a universal funding entitlement covering both degrees and … sub-degree qualifications”.156 This new joined-up system of funding would require, amongst other changes, “expanding the [student loan] system to cover other forms of post-compulsory education, including vocational training.”157

137.Such a system would reflect modern patterns of work and study. The University Alliance described a future where “many people will study at both colleges and universities at different points in their life—and not always in a linear way.”158 Witnesses suggested that it could lead to “fewer universities [ … ] a very different subject mix [ … ] a very different student mix.”159

138.Some witnesses were cautious about moving away from the current system, pointing out that higher and further education are “doing different things”.160 The Minister for Universities aimed to “have the appropriate funding system for each route”, drawing attention to the fact that “the FE route [ … ] has more work and employer-based work and study. That is a very different model from doing [a university degree] that is generally quite theoretical.”161

Foundations of a new system

139.A joined-up system needs to be designed to address the problems created by the current structure. It should:

140.This change should occur in parallel to our other reforms to the design of loans and the regulation of the sector (see Chapter 8). Implementing such a system would be a “fundamental challenge to the way the funding arrangements are now divided between further and higher education to the disadvantage of further education.”164

Additional incentives for studying Level 4 and 5

141.The aim of this new deal is to ensure that no one form of post-school education is, or is perceived to be, the superior route to the labour market. However, as previously discussed, the different types of post-school education do not start from an equal position. Full-time undergraduate degrees have occupied a privileged position in terms of resources and esteem for many years. Some witnesses suggested that, to compensate for the current inequality, other higher education provision required additional support and incentives to ensure that provision and demand are developed at the same time.165

142.We have considered whether additional measures should be put in place to ensure that other qualifications can compete with full-time undergraduate degrees under a new funding system. Such measures could include managing university student numbers; more favourable loan terms for further education college students; ‘golden handshakes’ such as offered to graduates training as teachers; or phased bonuses offered over the lifetime of a course. We support new incentives but want them to be the right ones, avoiding perverse incentives and behaviours elsewhere. We consider that further analysis is required on the operation of such options to ensure that no new perverse incentives are created.

143.A new deal is required for higher education funding which promotes all types of learning regardless of where or how it takes place. The system of funding higher education should be reformed so that it facilitates a fair and balanced provision of loan and grant funding across higher education.

144.For students, there should be one system of funding: students should be able to access loan funding and maintenance support for all full and part-time courses at Level 4 and above. This does not mean identical levels of support for students studying, for example, a one-year diploma and a three-year undergraduate degree. Differences between qualifications should be reflected in the loan rates and repayment structure.

145.The Government should explore restoring some teaching funding for further education colleges so they can cover costs and stimulate demand for courses at Levels 4 and 5. This should also be considered for part-time courses and modules at Level 4 and 5 such as those offered by the Open University.

146.The purpose of these reforms is to raise the status of all higher education qualifications, creating more flexible full and part-time routes and rebalancing the current offering. The Government should explore whether this should be supported by new financial incentives for entrants into higher education to study for qualifications other than undergraduate degrees.

Structure and regulation

147.At least 15 different agencies are involved in the delivery, funding and regulation of further education, higher education and apprenticeships.166 The complexity is compounded by differences in policy priorities and regulatory philosophies between—and sometimes within—sectors. This impedes integration of post-school education and innovation by providers.

Current system

148.The structure of the post-school education sector is complex, with multiple agencies funding and regulating the sector. There is a demarcation between universities and further education colleges. This extends to funding, admissions, inspection, qualifications and even data collection, for example:

149.A further distinction exists within ‘higher education’ which is divided into prescribed courses, defined in legislation and regulated and funded through the Office for Students, and all other courses which fall under the remit of the Education and Skills Funding Agency.

150.Apprenticeships cut across higher and further education. Responsibility for the regulation of ‘higher education’ apprenticeships (those at Level 4 and above). Is divided imprecisely between the Office for Students (OFS) and Ofsted. The OFS explains:

“Ofsted is responsible for inspecting the quality of apprenticeship training provision at Levels 4–5, unless the apprenticeship standard contains a prescribed HE qualification.

In the case of apprenticeship providers delivering prescribed HE as part of an apprenticeship standard, the OFS and Ofsted will reach a judgement, informed by joint working.”167

Figure 4: Funding and regulatory responsibilities

Form showing funding and responsibilities for different areas of education

Impact on the sector

151.Witnesses thought that the “artificial divide” created by regulation prevented integration and stifled innovation.168 Professors Alison Fuller and Lorna Unwin told us that the system “engendered passive and reactive behaviour at local and regional level, and a rule-dependent approach in government agencies”.169

152.The complex edifice is underpinned by an uneven set of operational priorities and regulatory philosophies. We have set out previously the policy of increased participation and market regulation of universities; further education is not regulated as a market and has no overall participation target; apprenticeship numbers are target driven. Within further education different parts of the sector have different objectives, as Gateshead College explained:

“There is a fundamental disconnect between the way that government agencies manage providers through the funding regime to deliver their priorities. Young people’s funding for 16–18 year olds [ … ] is based on doing what is right for the learners with the fundamental tenants of maths, English and work readiness, along with highly relevant qualifications [ … ]However, for adults, there is a disparity between the funding of 19–24 year olds and over 24 year olds, the methodology is transfixed with qualifications, which are often out of date.”170

153.The complex and piecemeal regulation of post-school education may prevent innovation and undermine efforts to reform the sector.

154.In higher education, one regulator should take responsibility for the whole sector. We recommend the Office for Student’s remit be extended to regulate and fund all higher education. It should have clear responsibility for all students in higher education, regardless of their course and level of study.

155.The Office for Students should be specifically required to:

(a)Ensure quality across all levels and institutions that provide higher education, and not just in one part of the system;

(b)Promote better availability and a more balanced offer across routes and levels within higher education;

(c)Identify and remove funding rules and regulatory barriers which prevent innovation and integration of different types of higher education;

(d)Ensure that clear information is provided to school leavers about the choices available to them and the lifetime financial consequences of those choices. This should extend to information about apprenticeships including the available salaries and the likelihood of permanent employment.

156.Other post school education, at Level 3 (A-Level equivalent) and below, should also be regulated by a single agency. To ensure parity of esteem between the sectors, this agency should have equivalent status of the Office for Students. It should be a Council with sufficient resources and credibility to champion further education.

Funding of Level 3 qualifications

157.Much of this report concentrates on higher education at Levels 4 and above. The evidence to the Committee was that the lack of sub-degree technical qualifications had led to a mismatch between the skills attained through the education system and those required by the economy. The recommendations are designed to address the inequalities in the system which have led to this mismatch.

158.There is an even greater injustice at Level 3 (qualifications equivalent to A-Level). Level 3 is an important step towards Level 4 and 5 qualifications and forms a distinct technical pathway into and through higher education. As set out earlier in this chapter, the main problem is that the money does not follow the student: the system of allocations effectively caps funding.

159.Government funding for Level 3 qualifications is available only to limited categories of learner: those under 19; students between 19–23 doing a first qualification; and unemployed adults doing a first qualification. Witnesses highlighted three problems with the current system.

(a)The cliff edge when a learner turns 19. At this age entitlement to a fully funded course ceases (although student are entitled to their first full Level 3 qualification paid for, this will not cover all students). Funding is also substantially reduced for students in their third year of a Level 3 qualification.

(b)The funding available for those over 19 covers only the first ‘full’ Level 3 qualification. This is defined as two A-Levels or equivalent. This excludes, in particular, those seeking to retrain. Julian Gravatt pointed out that “there is not much help if you are already trained to Level 3 or above in one sector but want to reskill to a different job.”171

(c)Whilst advanced learner loans cover Level 3 qualifications, relatively few learners take advantage of these: 74,000 loans were awarded in 2016/17. Professor Ewart Keep, Director of the Centre on Skills, Knowledge & Organisational Performance at the University of Oxford, told us that “the only bits of Level 3 adult loan-funded FE that are carrying on are where, essentially, the person has to get the qualification to obtain personal professional insurance [ … ] essentially, they are buying a licence to practise in their profession; they have to get it.”172

160.Witnesses suggested more support was needed for learners to access Level 3 qualifications and, if appropriate, progress to higher levels. Julian Gravatt said that “it would be fantastic if the Government were prepared to have a national programme that developed Level 3 skills for qualifications in particular areas.” Any such expansion in funding would need to be “reasonably focused in certain areas” and backed by a “proper strategy” for adult learning.173

161.The current funding arrangements for Level 3 qualifications provide a straitjacket: they prevent retraining and stifle attempts to create coherent pathways between higher and further education. We recommend providing uncapped state funding (on a tariff basis) for all students, full-time or part-time, irrespective of age, for their first qualification at Level 3. This is both fair and economically necessary.


102 Q 44 (Dr Philippa Lloyd)

103 Written evidence from Unison (HFV0060)

104 161 (Rt Hon Anne Milton MP)

105 Q 147 (Professor Sir Alan Tuckett)

106 See terminology section for the definitions of these terms.

107 Office for Students, Regulatory Framework (28 February 2018): https://www.officeforstudents.org.uk/publications/office-for-students-regulatory-framework-a-summary/ [accessed 23 May 2018]

108 Higher Education and Research Act 2017, section 83

109 Higher Education and Research Act 2017, section 83; Education Reform Act 1988, Schedule 6

110 Higher Education Funding Council England, Guide to funding 2017–18 (April 2017): http://www.hefce.ac.uk/media/HEFCE,2014/Content/Pubs/2017/201704/HEFCE_Funding_Guide_2017-18_.pdf [accessed 10 May 2018]

111 The Office for Students commenced operation on 1 April 2018. Prior to this date higher education funding was administered by the Higher Education Funding Council England.

112 In 2016/17 HEFCE allocated £1,39bn of teaching grants. Of these £1.26bn went to higher education institutions and £69m to Further Education colleges offered higher education provision. Hefce, Recurrent grants for 2016–17: Final allocations (October 2016): http://www.hefce.ac.uk/pubs/Year/2016/201631/ [accessed 8 May 2018]

113 Higher Education and Research Act 2017, section 83; Education Reform Act 1988, Schedule 6

114 Higher Education Funding Council England, Guide to funding 2017–18 (April 2017): http://www.hefce.ac.uk/media/HEFCE,2014/Content/Pubs/2017/201704/HEFCE_Funding_Guide_2017–18_.pdf [accessed 10 May 2018]

115 Ibid

116 Broadly, this funding covers learners up to their 19th birthday; the adult education budget covers learners over 19.

117 Department for Education, The funding formula: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/533103/The_funding_formula.JPG. [accessed 7 May 2018] There are over 13,000 approved qualifications. These are mainly equivalent to GCSE (Level 2) or A Level (Level 3). Education and Skills Funding Agency, Section 96: Qualifications (July 2017): https://www.gov.uk/guidance/section-96-qualifications [accessed 8 May 2018]

118 Q 126 (Alun Francis)

119 Ibid.

120 Department for Education, Apprenticeship funding: how it works (February 2018): https://www.gov.uk/government/publications/apprenticeship-levy-how-it-will-work/apprenticeship-levy-how-it-will-work#non-levy-paying-employers [accessed 10 May 2018] For a full explanation of the operation of the levy, see Chapter 6.

121 Ibid.

122 See Box 5.

123 Department for Education, Advanced Learner Loans, Application information, 2016/17 academic year final report (October 2017): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/653992/Advanced_Learner_Loans_2016–17_FINAL_.pdf [accessed 9 May 2018]

124 From 2019/20 approximately 50 per cent of the AEB will be devolved to six Mayoral Combined Authorities (Greater Manchester, West Midlands, Tees Valley, West of England, Cambridgeshire and Peterborough and Liverpool City Region) and the Greater London Authority. The EFSA will retain responsibility for funding non-devolved areas. Education and Skills Funding Agency, Helping providers understand implications of AEB devolution/delegation from 2019 to 2020: Education and Skills Funding Agency, ‘Preparing for adult funding devolution’ (December 2017): https://www.gov.uk/government/news/preparing-for-adult-funding-devolution [accessed 7 May 2018]

125 Education and Skills Funding Agency, Section 96: Qualifications (July 2017): https://www.gov.uk/guidance/section-96-qualifications [accessed 10 May 2018] ; Education and Skills Funding Agency, Guidance: Adult education budget funding and performance management rules 2017 to 2018 (January 2017): https://www.gov.uk/government/publications/adult-education-budget-funding-and-performance-management-rules-2017-to-2018 [accessed 10 May 2018]

126 Q 29 (Dr Conlon)

127 Higher education is funded largely through tuition fees which are paid for by student loans. A substantial proportion of the funding is therefore covered by students rather than the Government. The cost to the Government for higher education includes the remaining grant funding to higher education institutions (around £700 million for 2017/18) and the proportion of the loans which will be covered by public spending when written off at the end of their 30 year term (estimated to be around 48 per cent for the 2017/18 cohort). Chapter 10 discusses this aspect of the funding of higher education in more detail. Some courses in further education are paid for through advanced learner loans although take up of these has been low (see paragraph 159).

128 Q 161 (Rt Hon Anne Milton MP)

129 Q 161 (Sam Gyimah MP)

130 The Department stated: “We do not include restructuring funds in the overall cost to government as funding is only provided upon the approval of an application from an FE provider, and therefore the total funding to be made available is not yet known. Additionally, a significant proportion of the funding is provided as a loan, and therefore repaid by the college, thereby reducing the overall cost to Government.” Assuming this funding is allocated in full equally across the three years, it would provide an extra £242 million funding to FE in 2017/18.

131 HEFCE distributed £1.57bn of research grant funding and £1.26bn teaching grant funding. EFSA made payments of £1.3bn under the adult education budget.

132 Q 126 (Julian Gravatt)

133 Reproduced with permission from the IFS.

134 Written evidence from Professor Sandra McNally (HFV0067)

135 House of Commons Library, 16-19 Education Funding in England since 2010, Briefing Paper No 7019, 15 Jan 2018

136 Education Funding Agency Funding for academic year 2014 to 2015 for students aged 16 to 19 and high needs students aged 16 to 25 (December 2013): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/297504/140318_March_letter_to_sector_FINAL__3_.pdf [accessed 8 May 2018]

137 Q 126 (Richard Atkins CBE)

138 House of Commons Library, Adult further education funding in England since 2010, Briefing Paper No 7708, 27 March 2018

139 Letter from Nick Boles MP to the Skills Funding Agency (15 December 2015) p 11: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/485969/BIS-15-615-skills-funding-letter-2016-to-2017.pdf [accessed 7 May 2018]

140 Q 85 (Baroness Wolf of Dulwich)

141 Q 17 (Shakira Martin)

142 Written evidence from the Education Policy Institute (HFV0048)

143 Q 126 (Alun Francis)

144 Q 85 (Baroness Wolf of Dulwich)

145 Q 146 (Professor Sir Alan Tuckett)

146 Written evidence from the University of Central Lancashire (HFV0038)

147 Q 66 (Professor Mike Thomas)

148 Ibid.

149 Written evidence from Professor Mike Thomas (HFV0098)

150 Written evidence from the Education Policy Institute (HFV0048)

151 Written evidence from the Warwickshire College Group (HFV0097)

152 Q 127 (Julian Gravatt)

153 Q 127 (Richard Atkins CBE)

154 Written evidence from the University of Central Lancashire (HFV0038)

155 Written evidence from Step up to Serve (HFV0031)

156 Written evidence from the TUC (HFV0082); see also written evidence from Professor Schuler and others (HFV0023) and Q 56 (Professor Mike Thomas).

157 Written evidence from University College London (HFV0077)

158 Written evidence from the University Alliance (HFV0080)

159 Q 153 (Professor Ewart Keep); see also Q 77 (Richard Atkins CBE).

160 Q 59 (Pam Tatlow)

161 Q 161 (Sam Gyimah MP)

162 118 (Russ Shaw)

163 Written evidence from the Open University (HFV0059)

164 Q 144 (Professor Alison Fuller)

165 Q 127 (Julian Gravatt); written evidence from the Association of Colleges (HFV00070); Q 118 (Giles Derrington)

166 Appendix 8 sets out the role and function of the different bodies involved in the sector.

168 Written evidence from the University of Central Lancashire (HFV0038)

169 Written evidence from Professor Alison Fuller and Dr Lorna Unwin (HFV0061)

170 Written evidence from Gateshead College (HFV0058)

171 Q 128 (Julian Gravatt)

172 Q 146 (Professor Ewart Keep). The top six areas for Level 3 advanced learner loans awards in 2016/17 were: (1) Fitness instruction [5,050 awards]; (2) Teaching support [3,330]; (3) Accountancy [2,360]; (4) Nail technician [1,830]; (5) Access courses [1,520]; (6) Early years education [1,300]. Department for Education, Advanced Learner Loans, Application information, 2016/17 academic year final report (October 2017): https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/653992/Advanced_Learner_Loans_2016–17_FINAL_.pdf [accessed 9 May 2018]

173 Q 126 (Julian Gravatt), written evidence from the TUC (HFV0082)




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